SEC Whistleblower Lawyer Blog
On June 17, 2024, the U.S. Commodity Futures Trading Commission (the “CFTC”) reached a $55 million settlement with Trafigura Trading LLC, marking a significant aggressive shift in the agency’s approach to whistleblower protections. This case sets a new precedent in the CFTC’s enforcement program and underscores the CFTC’s commitment to protecting whistleblowers.
In its settlement, the CFTC alleged that Trafigura manipulated oil derivatives prices, exploited confidential information to gain an unfair advantage in gasoline transactions and, most importantly, that Trafigura failed to carve out an exception for whistleblowers in its employment agreement’s confidentiality provisions.
This marks the first time the CFTC has publicly taken a position on this whistleblower protection issue. The whistleblower carveout requires non-disclosure provisions to explicitly permit communications with law enforcement or regulators. The CFTC argues that absent these carveouts, such provisions cause confusion and impede voluntary, direct communications with regulators, like the CFTC, about possible violations.
Brian Young, director of the CFTC’s Whistleblower Office, touted the significance of this enforcement action, stating that it demonstrates the agency’s commitment to protecting potential whistleblowers and puts the market on notice that attempts to silence potential witnesses will not be tolerated.
In response, Trafigura has agreed to modify its NDAs to include language clarifying that employees are not restricted from communicating with governmental authorities about potential violations. The company has also voluntarily implemented a stronger compliance program.
The CFTC’s enforcement of whistleblower carveouts is wholly consistent with enforcement efforts of the Securities and Exchange Commission (SEC), which has filed over 20 enforcement actions since 2015 regarding the same issue.
As the dust settles on this landmark case, it’s clear that the CFTC is taking a more aggressive stance in an effort to protect whistleblowers and to remove obstacles from their reporting of CFTC violations.
Retaining Experienced SEC Whistleblower Attorneys
Hiring experienced and knowledgeable CFTC and SEC counsel is crucial to navigating and submitting your whistleblower tips, which can greatly increase the probability that the CFTC or SEC will initiate an investigation based on your information. If you wish to remain anonymous, you need an attorney to represent you and file on your behalf.
Silver Law Group and the Law Firm of David R. Chase jointly have experienced SEC and CFTC whistleblower lawyers, including a former SEC Enforcement attorney on the team. Our SEC and CFTC whistleblower attorneys can help you if you have information regarding securities or commodities violations.
You must provide timely, credible, and original information or analysis to be eligible. Contact us through our online form or at (800) 975-4345 for a consultation. Our attorneys work on a contingency fee basis, so it costs you nothing to hire us, and we collect our fees only if you receive a SEC or CFTC bounty. We have a strong financial incentive to help you collect the maximum award available, as we are paid only if you collect a bounty.