Sen. Chuck Grassley (R-Iowa) is pushing nominees to lead the Commodity Futures Trading Commission (CFTC) to commit to supporting a highly successful whistleblower program at risk of collapsing under the weight of its own successes.
“Because of its great success, the whistleblower fund is at risk of being depleted. The increasing size and quantity of fines arising from successful whistleblower disclosures have led to larger reward disbursements. Current law requires that the whistleblower fund be capped at $100 million, and any fines collected past the cap are remitted to the Treasury’s general fund. The disbursement of larger rewards from a capped fund poses an impending threat to the CFTC whistleblower program’s ability to function,” Grassley wrote in letters to three CFTC nominees.
Created in 2010, the CFTC whistleblower program distributes monetary awards to whistleblowers whose disclosures shine a light on misconduct in the financial sector. Awards are derived from fines and sanctions collected from violators of financial regulations, and the program carries no costs for taxpayers. In FY2020 alone, the office awarded nearly $20 million to whistleblowers. As award values grow, the program could be forced to make payouts that exceed the fund’s balance, which is capped at $100 million. Earlier this year, Congress passed Grassley’s CFTC Fund Management Act to make temporary changes to the program, allowing it to continue functioning in the event that the award fund is depleted before it can be replenished.
In letters to three CFTC commissioner nominees, Grassley again extolled the value of the program and sought commitments from the nominees to permanently address the fund’s constraints.
Grassley’s letter to CFTC Nominees:
