While a U.S. whistleblower is getting a multi-million dollar award for tipping off derivatives regulators, it could have been bigger if the person had spoken up sooner.
The U.S. Commodity Futures Trading Commission (CFTC) announced that it’s paying approximately US$2.5 million to a whistleblower who reported misconduct to regulators.
Yet, the CFTC noted that the award was reduced because of a delay in reporting to the regulator.
“Although this award was substantial, it was reduced because of an unreasonable delay in reporting the violations,” James McDonald, director of the CFTC’s enforcement division, said in a statement.
“We understand that whistleblowers may have reasons to delay reporting suspected Commodity Exchange Act violations, however, there is a point at which a delay becomes unreasonable,” said Christopher Ehrman, director of CFTC’s whistleblower office.
“Timeliness is critical because it plays a vital role in our assessment of whistleblower awards. The facts in this case indicated that the whistleblower unreasonably delayed in reporting information, which resulted in a diminished award,” he added.
The details of whistleblower awards are not disclosed in order to protect the anonymity of tipsters and prevent retaliation against them.
With this latest award, the CFTC has now paid out more than US$90 million to whistleblowers since its first award in 2014. The enforcement cases generated by these tips have, in turn, produced over US$730 million in sanctions against wrongdoers.