The Commodity Futures Trading Commission (CFTC) has a little-known whistleblower program that can result in a huge payoff for those reporting fraud to the CFTC. The Dodd-Frank Wall Street Reform and Protection Act (Dodd-Frank) created the CFTC whistleblower program. The benefits of the CFTC whistleblower program are threefold: confidentiality, employee protection and financial reward.
The CFTC whistleblower program has stronger confidentiality protections than other whistleblower statutes, such as the False Claims Act (FCA). Whistleblowers remain anonymous if they are represented by an attorney and have often remained anonymous to the CFTC up until they receive their financial award for blowing the whistle. Confidentiality assures potential whistleblowers that they will not be “under the gun” for standing up and doing the right thing.
A second protection is that employees who blow the whistle cannot be fired, demoted, threatened, harassed, discriminated against or suspended for being a whistleblower. If any of these actions are taken by an employer, then the employee may sue for back pay, damages and reinstatement. Generally, because of the greater confidentiality protection of the CFTC whistleblower program, fear of retaliation is mitigated.
Finally, the CFTC rewards those who step forward and do what is right- reporting fraud. The CFTC awards between 10 to 30 percent of the monies recovered by the CFTC if more than $1 million is collected. A whistleblower’s reward will be measured by the significance of the information provided, assistance provided by the whistleblower and his lawyer and the interest of the CFTC in deterring violations of the law.
A CFTC whistleblower must have independent and direct knowledge of violations of the Commodity Exchange Act that leads to a government enforcement action recovering more than $1 million in monetary sanctions. The Commodity Exchange Act can be found at 7 U.S.C. § 1 of the United States Code. This Act forbids fraud, manipulation, excessive speculation and abusive actions on the commodity, financial futures and options markets. A whistleblower who has knowledge of any of these listed violations of the Commodity Exchange Act may qualify as a CFTC whistleblower and should contact a lawyer immediately to protect his or her rights.
Besides the CFTC whistleblower program, whistleblowers can also help prosecute government fraud through the False Claims Act. In order to qualify as a whistleblower under the False Claims Act, a person must have direct knowledge of a false claim being submitted to the federal or state government for payment. False Claims Act cases are filed for a variety of fraudulent schemes against the government. The health care industry, specifically Medicare and Medicaid, are commonly defrauded and ripe for a False Claims Act lawsuit. Additionally, many government contractors, especially defense contractors, have defrauded the federal government for the past 10 years as the War on Terror continues.
Anyone considering filing a False Claims Act lawsuit should know that his or her suit will be under seal for potentially several months or even years until the government decides whether it wants to intervene in the case. Also, the False Claims Act forbids employers from retaliating, harassing or threatening employees for reporting fraud to the government. Finally, the possibility of earning 15-25 percent of the government’s recovery is a positive incentive for whistleblowers to step forward and tell the truth. It is in the taxpayer’s interest that whistleblowers speak out against fraud being committed on the government.
Many states have adopted state versions of the False Claims Act. Most fraudulent schemes are very complex and only insiders know the intricate details of the fraud. However, it is not a requirement that the whistleblower be an employee of the company defrauding the government, so long as the whistleblower has direct knowledge of the fraud committed.
Lawyers in the Consumer Fraud Section at Beasley Allen continue to vigorously investigate fraud against both the federal and state governments and encourages anyone who knows of fraudulent activities to step forward. Potential whistleblowers have the right to not be retaliated against for doing the right thing and reporting the fraud they have witnessed. Anyone considering doing the right thing and blowing the whistle is strongly urged to seek legal advice before doing so. Lawyers at Beasley Allen are very familiar with the federal False Claims Act and its state counterparts and can guide whistleblowers along the process. If you have any information and would like to speak with a lawyer, please contact Andrew Brashier at Andrew.Brashier@BeasleyAllen.com, or at 1-800-898-2034 or 334-269-2343.
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.