What does it mean for information to “lead to” successful CFTC enforcement that can lead to a whistleblower’s cash award?

Whistleblower awards are available only when information “leads to” a successful enforcement action. Under the CFTC’s regulations, that criterion is satisfied in several different circumstances.

First, information “leads to” an enforcement action if it causes the CFTC to open a new investigation, reopen a closed investigation, or pursue a new line of inquiry in an existing investigation, and the CFTC subsequently obtains a recovery.

Second, information can satisfy the requirement if it “significantly contributes” to the success of an existing investigation, even if it does not cause the CFTC to open or expand that investigation. For example, information might supply critical evidence that the CFTC needs to prove its claims, such as the defendant’s knowledge that it made a false statement.

Finally, information can lead to a successful enforcement action if the whistleblower reports it through an entity’s internal whistleblower program in addition to the CFTC, the entity later reports the information to the CFTC, and the information significantly contributes to a CFTC investigation.

Awards are not available if the CFTC does not use the whistleblower’s information in a way that meaningfully impacts its enforcement efforts. Some whistleblowers thus do not receive an award even though the CFTC takes action against the conduct they disclosed.

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