ATTORNEY NEWSLETTER
CFTC Announces Several Covered Actions
Anonymous Tips From Whistleblower Start Cases
Commodities and Futures Trading
In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), Pub. L. 111-203, established a whistleblower program within the U.S. Commodities Futures Trading Commission (CFTC) to encourage individuals with information of commodities and futures trading fraud to report the fraud to the agency and potentially receive a reward if the agency recovers from the alleged wrongdoer. See 7 U.S.C. § 26 et seq. Fraudulent derivatives trading can occur in futures, swaps, options, commodities and currencies including virtual or digital currencies. If you have information of any form of commodities or options trading fraud call Evans Law Firm, Inc. We can assemble your information in the form required by the CFTC for investigation and possibly a reward if the agency completes a successful enforcement action including recovery of civil penalties or disgorgement of illegal gains. If you have information of any form of commodities trading fraud in Los Angeles or Orange County call us today at (415)441-8669 or toll free at (888)503-8267.
Recent Covered Actions[1]
Here are several examples of recent actions by the CFTC published by the CFTC as “Covered Action” where whistleblowers are eligible for rewards if they provided the agency with information about the conduct acted on by the agency:
- Covered Action No. 2021-017 – Citibank, N.A. and Citigroup Global Markets Limited. In September 2017, the CFTC entered an order that Citi failed to properly report swap transactions. The recent order finds that after the 2017 order, Citi still failed to report swap transactions properly and failed to perform its supervisory duties diligently with respect to swap data reporting, in violation of the 2017 order.
- Covered Action No. 2021-018 – Mizuho Capital Markets LLC. The CFTC order finds that Mizuho Capital failed to establish, maintain, and follow written policies and procedures reasonably designed to ensure that it engages in portfolio reconciliation with its non-swap dealer counterparties.
- Covered Action No. 2021-019 – Interactive Brokers LLC. The CFTC finds that Interactive Brokers failed for a period of time to allow customers to place limit orders on buy or sell orders for crude oil contracts and improperly calculated customer margins causing customers to experience trading losses estimated at $82.57 million.
- Covered Action No. 2021-020 – Payward Ventures, Inc. d/b/a Kraken. CFTC ordered a $1.25 million civil penalty against Payward d/b/a Kraken for offering illegal margin accounts to trade digital currencies failing to register as a merchant for digital assets.
Tips And Covered Action Rewards
A CFTC case begins with a TCR (“Tip, Complaint, or Referral”) Form filed with the Commission. The Commodity Exchange Act (CEA), 7 U.S.C. § 1 et seq. and 17 C.F.R. Part 1 et seq., provides confidentiality protections for whistleblowers submitting TCRs. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected. Once the CFTC determines a fine or obtains any recovery based on the information contained in the TCR then submit a Form WB-APP with the CFTC to claim a reward for the information they provided that led to the successful enforcement action, known as a “Covered Action.” 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 injured customers to fund the program.
Contact Us
Ingrid M. Evans represents individuals with information of any form of trading fraud actionable before the CFTC and the U.S. Securities and Exchange Commission. She can be reached at (415) 441-8669, or toll free at (888)503-8267 or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Ingrid also represents whistleblowers in cases involving the False Claims Act, offshore tax avoidance schemes or other tax fraud before the Internal Revenue Service, and bank fraud under the Financial Reform, Recovery, and Enforcement Act (FIRREA/FIAFEA),
[1] Evans Law Firm, Inc. is not involved in any of these reported Covered Actions in any way. We are just reporting the public announcements made by the CFTC with respect to these cases.
