The Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) each operate whistleblower programs established by Congress to incentivize whistleblowers to report specific, timely, and credible information about possible federal securities laws violations. Typical examples of violations include market manipulation, misuse of client funds, insider trading, and fraudulent offerings.
The SEC Whistleblower Program
The SEC is authorized to provide monetary awards to eligible individuals who come forward with high-quality original information that leads to an SEC enforcement action in which over $1 million in sanctions is ordered. The range for awards is between 10% and 30% of the money collected. In fiscal year 2025, the SEC awarded over $60 million to whistleblowers.
To be eligible for an award, whistleblowers and their attorneys must submit their information directly to the SEC. Unlike other programs, the SEC whistleblower program has numerous safeguards to allow anonymous whistleblowing. The whistleblower may opt to remain anonymous at the time of submission and still be eligible for an award. The program also offers protections in the event of retaliation by an employer.
The tip to the SEC must relate to matters regulated by the agency, which generally include securities fraud, accounting fraud, market manipulation, investor violations, and insider trading.
The CFTC Whistleblower Program
The CFTC uses a substantially similar process as the SEC program: whistleblowers who report specific, timely, and credible information about possible federal commodities laws violations are eligible for awards up to 30% of the money collected when sanctions exceed $1 million. The CFTC also provides anonymous reporting protections and prohibits retaliation by employers.
The tip to the CFTC must relate to matters regulated by the agency, which generally include commodities fraud, derivatives manipulation, futures manipulations, insider trading, commodity pool trading, and more.
How are these programs different from other options?
Other options, such as the False Claims Acts, require the whistleblower to file a lawsuit on behalf of the government, and the government’s investigation follows a different track. The SEC and CFTC programs involve reporting fraud directly to regulatory agencies without filing a court case, which provides a greater likelihood of anonymity. In addition, the SEC and CFTC programs currently do not have a first-to-file bar like the False Claims Acts.
However, there are strict requirements regarding the method and details of the whistleblower’s report to these agencies to qualify for an award. A whistleblower with otherwise useful information may be disqualified from eligibility for an award for numerous issues, such as submitting information without the appropriate form, reporting without representation by an attorney, or failing to meet certain deadlines.
How do I know if I have a case?
Contact our firm for a free, confidential consultation to evaluate your case. To make the most of your call, have the following information ready, if known:
- What financial product is at issue? E.g., cryptocurrency, bonds, stocks.
- Which regulated entity or person is violating the law?
- What evidence or information do you have that a regulation has been violated?
- Who has been negatively impacted by this conduct, and is there a financial loss?
