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CFTC Awards Almost $200 Million To Deutsche Bank Whistleblower

Courtesy of ZeroHedge View original post here.

In a release out Thursday, the CFTC said it had issued a monstrous $200 million whistleblower award to someone whose "specific, credible, and timely original information significantly contributed to an already open investigation and led to a successful enforcement action, as well as to the success of two related actions, by a U.S. federal regulator and a foreign regulator."

It marks the largest payout ever by the Commodity Futures Trading Commission.

Information provided by the whistleblower "led the CFTC to important, direct evidence of wrongdoing," the release stated. It continued: 

In order to qualify for an award, a whistleblower who significantly contributed to the success of an enforcement action must demonstrate that there is a “meaningful nexus” between the information provided and the CFTC’s ability to successfully complete its investigation, and to either obtain a settlement or prevail in a litigated proceeding. The Commission determined here that the whistleblower met this standard. 

The whistleblower’s claim in connection with a third related action by a state regulator was denied because the whistleblower’s information was never shared with the state regulator. 

While the CFTC's release didn't name the whistleblower or the case the award was related to, follow on reporting by the Wall Street Journal identified the whistleblower as someone who helped regulators investigate manipulation of global interest-rate benchmarks by Deutsche Bank.

David Kovel, a managing partner at law firm Kirby McInerney LLP who represents the whistleblower, said: “We’re very happy that the CFTC was able to reverse an earlier decision and turn around their thinking. It says a lot about the people there that they don’t feel forced to stick with the wrong decision given the amount that’s at stake.”

The whistleblower had offered information that helped lead to $2.5 billion in settlements with Deutsche Bank in 2015. 

“The kind of information he provided was of the sort that was very hard to get if you don’t know where to look in a big financial organization,” Kovel added. 

Dawn Stump, a Republican commissioner on the CFTC, was against tailoring the award to fines levied by foreign regulators. “I believe we need to take an especially close look at cases where a whistleblower asks the commission to tap its limited Customer Protection Fund for an award relating to an action by a foreign futures authority to address harm outside the United States,”  she told the Journal. 

Mary Inman, an attorney representing whistleblowers at law firm Constantine Cannon LLP, concluded: “It’s showing that the CFTC program, like the SEC program, over the past 10 years, has really reached its maturity.” 


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