Don't know if this was index related, but none the less of interest. RELEASE Number 8098-19 December 19, 2019 CFTC Awards More Than $1 Million to Whistleblower Washington, DC — The U.S. Commodity Futures Trading Commission today announced it will award more than $1 million to a whistleblower whose tip helped expose a scheme that violated the Commodity Exchange Act (CEA) and eventually led to the CFTC filing charges. The individual first provided the information through their employer’s internal compliance program to another regulator and then subsequently provided that information directly to the CFTC. This award is significant because it recognizes that whistleblowers are eligible to receive an award for 1) being the original source of information the CFTC receives from another regulator, or 2) a tip that leads to evidence of a violation the CFTC ultimately charges, even if the reported conduct itself does not form the basis for those charges. “Today’s award shows how referrals from other regulators can have a meaningful impact on the Commission’s enforcement program, and lead to whistleblower awards from the CFTC. We are committed to continuing to work with other regulators to maximize the impact and effectiveness of our enforcement and whistleblower programs,” said CFTC Director of Enforcement James McDonald. “As the specific facts and circumstances of this matter demonstrate, the whistleblower does not have to identify the exact wrongdoing the CFTC ultimately charges—it is enough for their information to lead CFTC investigators directly to evidence of one or more of the agency’s claims,” said CFTC Whistleblower Office Director Christopher Ehrman. “Here, the whistleblower identified a problem in one area, and our Division of Enforcement used that knowledge and the whistleblower’s subsequent assistance to uncover illegality in another.” About the CFTC’s Whistleblower Program The CFTC’s Whistleblower Program was created under Section 748 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Since issuing its first award in 2014, the CFTC has awarded approximately $100 million to whistleblowers. CFTC actions associated with those awards have resulted in monetary relief totaling more than $800 million. The CFTC issues awards related not only to the agency’s enforcement actions, but also in connection with actions brought by other foreign or domestic regulators if certain conditions are met. The CEA provides confidentiality protections for whistleblowers. Regardless of whether the CFTC grants an award, the CFTC will not disclose any information that could reasonably be expected to reveal a whistleblower’s identity, except in limited circumstances. Consistent with this confidentiality protection, the CFTC will not disclose the name of the enforcement action in which the whistleblower provided information or the exact dollar amount of the award granted. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected. All whistleblower awards are paid from the CFTC Customer Protection Fund, which was established by Congress, and is financed entirely through monetary sanctions paid to the CFTC by violators of the CEA. No money is taken or withheld from harmed investors to fund the program. * * * * * Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC’s Whistleblower Office via a toll-free hotline (866-873-5675) or file a tip or complaint online. More information about the CFTC’s Whistleblower Program can be found at: https://www.whistleblower.gov/
Is this real? If so, why haven't they made any arrest from the too-big-to-fail Wall Street firms regarding the 2008 financial crisis?
I saw things in the 90's that would have won me a whistleblower award [if it was today]. Didn't even think it was that bad at the time. Actually seemed normal. I also know of a guy who was party to these acts, who lost his job on a trading desk for being an asshole.... and then went on to work for a major regulator. All back in the 90's.
Which specific laws were broken and by whom that weren't prosecuted? The problem was deregulation that meant most of the damage was caused by actions that were perfectly legal at the time. Can't blow a whistle on someone following existing laws!
First of all, CFTC regulates the CDO market and SEC monitors the credit default swaps. They were either incompetent to deal with or implicit with the Wall Street banks by looking the other way until the subprime fiasco erupted in 2008. So blow that whistle as loud as you want and I assure you it will land on a deaf ear. Second, no laws were broken? Did you stick your head up your ass all throughout 2005-2008? Subprime lenders were giving loans en masse to anyone who wanted one without questions asked all thoughout that time. Well, who exactly bankrolled those operations and then wrapped those fraudulent loans up as CDOs? That's right, the fat cats on Wall Street. But isn't it funny? A handful of small time nobodies that worked for these shoddy subprime lenders got busted by the Fed but nobody from the reputable Wall Street banks got nailed.
Again, name a specific law and a specific person. Simple ask isn't it? Lets get even more specific and ask what CDS laws were broken? SEC can't enforce a law that doesn't exist, they can only pass regulations to implement laws passed by Congress and signed by the President. There were no such laws on CDS' prior to 2008, that was the crux of the problem. Believe me I understand what happened in 2008 in excruciating detail. Precisely because I understand the issues I understand it wasn't a failure of enforcement but a failure of laws to enforce. Any time I ask for specific details from the anti "fat cat" crowd I get what we see here from you here, the opposite of specific names and laws. If you really care to ensure this doesn't happen again, you need to spend the time to either be at a place where you can cite names and laws, or more likely if you'd put in the time you'd understand what the real problem was we could have a more meaningful conversation and you wouldn't be crying about failure to enforce what at the time were non-existent laws.
Are you insisting that knowingly selling an asset you knew were below investment grade is not a fraud? I don't need to cite any law (although I'm sure I could if I research hard enough). Simply, what was on their book at the time would clearly show that those mortgage-backed securities they were packaging as CDOs were fraudulent. Equally culpable were the credit rating agencies like Moody's who gave inflated rating to garbage CDOs. Did anyone from Moody's ever went to jail for that?