Two federal financial whistleblower programs recently released record-breaking reports for Fiscal Year 2022, which ran through September.

The U.S. Commodity Futures Trading Commission, which oversees cryptocurrency, reported more than $3 billion in sanctions from all whistleblower-related actions and an increase in whistleblower tips. The CFTC’s Whistleblower Office received 1,506 whistleblower tips and complaints in FY 2022, an increase of 50% from the prior fiscal year.

And in October 2021, the CFTC Whistleblower Office announced an award of nearly $200 million to a single whistleblower – the largest award issued since Congress established whistleblower programs at the CFTC and Securities and Exchange Commission with the passage of the Dodd-Frank Act. 

In its annual report, the CFTC Whistleblower Office said the majority of tips it received in FY 2022 involved fraudulent misappropriation and solicitation involving crypto and digital asset, and said there’s been a rise in both crypto/digital asset schemes and some general investment schemes originating from online communications through social media or dating sites, for example, romance scams.

Following the FTX collapse, CFTC commissioner Kristin Johnson recently told Bloomberg that “in the context of the digital-asset space, the value of having those vocal whistleblowers and tipsters is critical.” Earlier in the year, CFTC chair Rostin Behnam referenced the Whistleblower Office during a keynote address at a Futures Industry Association conference.

“With greater focus during this time of great global uncertainty on the opportunities that the digital asset infrastructure may afford bad actors, including sanctioned individuals and institutions, to bypass the law and remain anonymous, the CFTC’s Whistleblower Program becomes an increasingly important tool,” Benham said. “This too highlights the urgency for a more unified global approach to regulation in the digital asset space.”

The SEC recovered a record $6.9 billion in penalties during FY 2022 and its Whistleblower Office issued approximately $229 million in 103 awards, making it the SEC’s second-highest year in terms of dollar amounts and number of awards. The SEC Whistleblower Office also received a record number of whistleblower tips, more than 12,300, in FY 2022.

In its report, the SEC said: “In addition to vigorously safeguarding whistleblowers’ anonymity, the SEC protects them by pursuing individuals or entities who take steps to impede, or retaliate against them for, their whistleblowing. This was reflected in enforcement actions against the Brink’s Company, which the SEC charged and penalized for requiring certain employees to sign restrictive confidentiality agreements, and against the co-founder of a technology company, whom the SEC charged with impeding an employee from communicating with the SEC regarding potential misconduct.” 

Securities fraud whistleblowers need an attorney who understands the changes to the law made following the 2008 financial collapse.

The Dodd-Frank law added incentivized whistleblower programs similar to the qui tam provisions in the False Claims Act, creating powerful new tools for enforcing securities and commodities laws.

While elements of these new programs draw from the False Claims Act, Dodd-Frank whistleblower actions are different from False Claims Act lawsuits in important ways. 

If you believe someone has knowingly committed securities fraud and you would like to learn more about or would like to be a Dodd-Frank whistleblower, the securities whistleblower lawyers at Keller Grover can help you. The lawyers at Keller Grover understand whistleblower laws, including provisions to protect the whistleblower, and strive to achieve the best possible results for their clients.