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CFTC bolsters rules to shield whistleblowers from retaliation
May 22, 2017 / 7:06 PM / 6 months ago

CFTC bolsters rules to shield whistleblowers from retaliation

WASHINGTON (Reuters) - The top U.S. derivatives regulator took steps to strengthen its whistleblower rules on Monday by building in new protections to shield tipsters from retaliation or being muzzled by their employers.

The reforms to the U.S. Commodity Futures Trading Commission’s whistleblower program are similar to provisions already in place at its sister agency, the Securities and Exchange Commission.

Under the new rules, the CFTC said that companies cannot take steps to impede a would-be whistleblower from speaking with the CFTC about possible violations of the federal derivatives laws, such as by forcing them to sign confidentiality agreements or other gag orders.

The CFTC will now also be able to pursue civil anti-retaliation actions against companies or individuals who violate the rules.

In addition, whistleblowers will be able to bring private lawsuits against employers if they believe they are the victims of retaliation.

“The whistleblower program is an integral part of the division’s efforts to identify and prosecute unlawful conduct,” CFTC Enforcement Director James McDonald said in a statement.

Both the SEC and the CFTC won broad new powers from the 2010 Dodd-Frank law to create programs that provide financial incentives for whistleblowers to come forward with tips about possible fraud or other wrongdoing.

Whistleblowers whose tips lead to monetary sanctions of more than $1 million can be eligible to win between 10 percent and 30 percent of the total amount collected by the government.

However, some of the SEC’s rules for the program went much further than the CFTC‘s, by allowing the securities regulator to police employers who try to retaliate against whistleblowers.

In recent years, the SEC has stepped up its scrutiny regarding whistleblowers.

It has filed a number of cases against companies that tried to silence whistleblowers by forcing them to forgo receiving awards or prevent them from talking to the government.

In addition to adding new anti-retaliation provisions to its rules to harmonize them with the SEC, the CFTC also said Monday it had updated its rules governing the process for filing claims to be considered for awards, and clarified who can be eligible for a whistleblower award.

Reporting by Sarah N. Lynch; additional reporting by Eric Walsh; Editing by Lisa Shumaker and Jonathan Oatis

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