CFTC awards whistleblower $8M despite involvement in misconduct

“Based on the whistleblower’s involvement in the underlying conduct, the whistleblower provided extremely valuable insider information at a critical time during the investigations,” said Brian Young, CFTC whistleblower office director, in a Monday press release.

The details: While the CFTC did not unveil the name of the whistleblower or the company where the misconduct occurred, the law firm of Kohn, Kohn & Colapinto announced Tuesday that it represented the Trafigura whistleblower who was awarded $8 million.

“This is a great day for accountability and for fighting transnational corruption,” said Kohn, Kohn & Colapinto founding partner Stephen Kohn, who represented the whistleblower during the CFTC’s confidential investigation, in a separate press release.

Compliance considerations: According to the CFTC, the whistleblower “provided direct evidence” that included “knowledge and observations about clients, coworkers, and senior leadership at the liable entity or entities. This ultimately saved substantial time and resources for staff and resulted in a far stronger and more triable case in the event of litigation.”

According to the CFTC’s award notice, the agency said a total of six whistleblowers came forward with information about the misconduct. But only one whistleblower met the CFTC’s criteria for a whistleblower award with “original information voluntarily submitted by the whistleblower that led to the successful resolution of the commission action.”

In the notice, the CFTC said it would not have been able to bring a successful enforcement action without the whistleblower’s information. The information also prompted separate investigations by other federal agencies, the notice added.

Editor’s note: The original version of this story incorrectly connected the $8 million whistleblower award to a specific enforcement action.