Whistleblower Awards Process, 24487-24521 [2017-10801]
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Federal Register / Vol. 82, No. 102 / Tuesday, May 30, 2017 / Rules and Regulations
(d) Inspection and production of
regulatory records. Unless specified
elsewhere in the Act or Commission
regulations in this chapter, a records
entity, at its own expense, must produce
or make accessible for inspection all
regulatory records in accordance with
the following requirements:
(1) Inspection. All regulatory records
shall be open to inspection by any
representative of the Commission or the
United States Department of Justice.
(2) Production of paper regulatory
records. A records entity must produce
regulatory records exclusively created
and maintained on paper promptly
upon request of a Commission
representative.
(3) Production of electronic regulatory
records. (i) A request from a
Commission representative for
electronic regulatory records will
specify a reasonable form and medium
in which a records entity must produce
such regulatory records.
(ii) A records entity must produce
such regulatory records in the form and
medium requested promptly, upon
request, unless otherwise directed by
the Commission representative.
(4) Production of original regulatory
records. A records entity may provide
an original regulatory record for
reproduction, which a Commission
representative may temporarily remove
from such entity’s premises for this
purpose. Upon request of the records
entity, the Commission representative
shall issue a receipt for any original
regulatory record received. At the
request of a Commission representative,
a records entity shall, upon the return
thereof, issue a receipt for the original
regulatory record returned by such
representative.
■ 3. In § 1.35, revise paragraph (a)(5) to
read as follows:
§ 1.35 Records of commodity interest and
related cash or forward transactions.
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(a) * * *
(5) Form and manner. All records
required to be kept pursuant to
paragraphs (a)(1), (a)(2), (a)(3), and (a)(4)
of this section, other than pre-trade
communications, shall be kept in a form
and manner that allows for the
identification of a particular transaction.
*
*
*
*
*
PART 23—SWAP DEALERS AND
MAJOR SWAP PARTICIPANTS
4. The authority citation for part 23
continues to read as follows:
■
Authority: 7 U.S.C. 1a, 2, 6, 6a, 6b, 6b–
1, 6c, 6p, 6r, 6s, 6t, 9, 9a, 12, 12a, 13b, 13c,
16a, 18, 19, 21.
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Section 23.160 also issued under 7 U.S.C.
2(i); Sec. 721(b), Pub. L. 111–203, 124 Stat.
1641 (2010).
5. In § 23.203, amend paragraph (b) as
follows:
■ a. Revise paragraph (b)(1); and
■ b. Remove and reserve paragraph
(b)(2).
The revisions to read as follows:
■
§ 23.203 Records; retention and
inspection.
*
*
*
*
*
(b) Record retention. (1) The records
required to be maintained by this
chapter shall be maintained in
accordance with the provisions of § 1.31
of this chapter, except as provided in
paragraph (b)(3) of this section. All such
records shall be open to inspection by
any representative of the Commission,
the United States Department of Justice,
or any applicable prudential regulator.
Records relating to swaps defined in
section 1a(47)(A)(v) shall be open to
inspection by any representative of the
Commission, the United States
Department of Justice, the Securities
and Exchange Commission, or any
applicable prudential regulator.
(2) [Reserved]
*
*
*
*
*
Issued in Washington, DC, on May 23,
2017, by the Commission.
Christopher J. Kirkpatrick,
Secretary of the Commission.
Note: The following appendix will not
appear in the Code of Federal Regulations.
Appendix to Recordkeeping—
Commission Voting Summary
On this matter, Acting Chairman Giancarlo
and Commissioner Bowen voted in the
affirmative. No Commissioner voted in the
negative.
[FR Doc. 2017–11014 Filed 5–26–17; 8:45 am]
BILLING CODE 6351–01–P
COMMODITY FUTURES TRADING
COMMISSION
17 CFR Part 165
RIN 3038–AE50
Whistleblower Awards Process
Commodity Futures Trading
Commission.
ACTION: Final rule.
AGENCY:
The Commodity Futures
Trading Commission (‘‘Commission’’) is
amending its regulations and forms to
enhance the process for reviewing
whistleblower claims and to make
related changes to clarify staff authority
to administer the whistleblower
SUMMARY:
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program. The Commission also is
making appropriate rule amendments to
implement its reinterpretation of the
Commission’s anti-retaliation authority.
DATES: This final rule is effective July
31, 2017.
FOR FURTHER INFORMATION CONTACT:
Anthony Hays, Counsel, (202) 418–
5584, ahays@cftc.gov, Commodity
Futures Trading Commission, Three
Lafayette Centre, 1155 21st Street NW.,
Washington, DC 20581.
SUPPLEMENTARY INFORMATION: The
Commission is amending its rules in
§§ 165.1 through 165.19 and appendix
A, and adopting new rule § 165.20 and
appendix B as well as amending Forms
TCR (‘‘Tip, Complaint or Referral’’) and
WB–APP (‘‘Application for Award for
Original Information Provided Pursuant
to Section 23 of the Commodity
Exchange Act’’).
I. Background
In 2011, the Commission adopted its
part 165 regulations, which implement
Section 23 of the Commodity Exchange
Act (‘‘CEA’’), 7 U.S.C. 26, by
establishing a regulatory framework for
the whistleblower program.1 Part 165
provides for the payment of awards,
subject to certain limitations and
conditions, to whistleblowers who
voluntarily provide the Commission
with original information about a
violation of the CEA that leads to the
successful enforcement of an action
brought by the Commission that results
in monetary sanctions exceeding
$1,000,000 (‘‘Covered Action’’), or the
successful enforcement of a Related
Action, as that term is defined in the
rules.
The award amount must be between
10 and 30 percent of the amount of
monetary sanctions collected in a
Covered Action or a Related Action and
is paid from the CFTC Customer
Protection Fund. The Commission has
discretion regarding the amount of an
award based on the significance of the
information, the degree of assistance
provided by the whistleblower, and
other criteria.
Since the whistleblower program was
established in 2011, the need for certain
improvements has become apparent. In
order to address that need the
Commission proposed amendments to
the part 165 rules (‘‘Proposal’’).2 As
explained further below, these rules
provide for targeted revisions to the
claims review process and to the
authority of staff to administer the
1 See Whistleblower Incentives and Protection, 76
FR 53172 (Aug. 25, 2011).
2 Whistleblower Awards Process, 81 FR 59551
(Aug. 30, 2016).
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whistleblower program. The
Commission also proposed to amend the
rules to implement its anti-retaliation
authority under Section 23(h)(1) based
on a reinterpretation of that authority.
Finally, the Commission proposed to
amend its rules to permit
whistleblowers to receive awards based
on both Covered Actions and the
successful enforcement of Related
Actions, as defined in the rules.
The Commission received seven
comment letters in response to the
Proposal. Most of the comment letters
focused on specific aspects of the
proposed rule amendments and made
targeted recommendations and
suggestions. Three of the comment
letters were from private individuals,
two were from law firms with
whistleblower practices, and two were
from whistleblower advocacy groups.3
Most of the comments received were
generally supportive of the
Commission’s whistleblower program
and proposed changes to the rules. One
comment letter was critical of the
current process for handling
whistleblower award claims but did not
provide specific comments on the
proposed rules.4 One of the
whistleblower advocacy groups
incorporated by reference the comment
letter previously submitted by the other
group.5
II. Description of Final Rules
The Commission is adopting the
amendments to its part 165
whistleblower rules as set forth in the
Proposed Rules with certain changes
made in response to public comments.
The amendments and the public
comments relevant to each amendment
are discussed below.6
Eligibility Requirements for
Consideration of an Award
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a. Proposed Rule
The Commission proposed targeted
changes to the rules relating to
3 See, respectively, the following: Letter dated
September 12, 2016, from Joseph N. Perlman; Letter
dated September 16, 2016, from Chris Barnard;
Letter dated September 27, 2016, from Matthew
Erpen; Letter dated September 29, 2016, from
Robert D.M. Garson, Garson, Segal, Steinmetz,
Fladgate LLP (GS2Law); Letter dated September 29,
2016, from Eric L. Young, Esq., and James J.
McEldrew, Esq., McEldrew Young (MY); Letter
dated September 28, 2016, from Jacklyn N. DeMar,
Acting Director of Legal Education, Taxpayers
Against Fraud (TAF); and Letter dated September
29, 2016, from Stephen M. Kohn, Executive
Director, and David K. Colapinto, General Counsel,
National Whistleblower Center (NWC).
4 See Joseph N. Perlman comment letter.
5 See NWC comment letter.
6 The public comments on the Proposed Rule are
available at https://comments.cftc.gov/
PublicComments/CommentList.aspx?id=1733.
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consideration of an award. The
Commission proposed to revise Rule
165.5 to make clear that a claimant may
receive an award in a Covered Action,
in a Related Action, or both. Also in
Rule 165.5, the Commission proposed to
make clear that a claimant may be
eligible for an award by providing the
Commission original information
without being the original source of the
information, and the Commission
provided the public with notice that the
Commission has discretion to waive its
procedural rules based upon a showing
of extraordinary circumstances.
In addition, the Commission proposed
to revise the definition of ‘‘original
source’’ in Rule 165.2(l) to extend the
timeframe from 120 to 180 days that a
whistleblower has to file a Form TCR
pursuant to Rule 165.3 after previously
providing the same information to
Congress, any other federal or state
authority, a registered entity, a
registered futures association, a selfregulatory organization, or to any of the
persons described in Rule 165.2(g)(4)
and (5).
b. Comments Received
The Commission received several
comments regarding the proposed
changes to the requirements for
consideration of an award.
Proposed Rule 165.5(b) removed
being the original source of information
received by the Commission from the
eligibility criteria for an award. The
Commission received one comment
which endorsed this approach.7
The Commission received two
comments regarding the Commission’s
proposal to amend Rule 165.5(c) to
allow the Commission to waive
procedural requirements in
extraordinary circumstances. Both
commenters supported the proposed
change to this rule.8 One commenter
noted that the proposed change to this
rule is consistent with the overall policy
goals of the whistleblower program and
that whistleblowers have varying levels
of sophistication and familiarity with
the procedural requirements.9 Another
commenter noted that rigid application
of the procedural requirements would
undermine the spirit of Congress when
it created the whistleblower program
and that the proposed change would
further encourage whistleblowers to
provide information even when they
may not have followed all of the
technical rules to be eligible for an
award.10
TAF comment letter.
TAF and MY comment letters.
9 See TAF comment letter.
10 See MY comment letter.
Proposed Rule 165.2(l) extended the
deadline from 120 to 180 days that a
whistleblower has to make a submission
to the Commission and retain status as
the original source of information after
first submitting the information to
Congress, any other federal or state
authority, a registered entity, a
registered futures association, a selfregulatory organization, or to any of the
persons described in paragraphs (g)(4)
and (5) of Rule 165.2 to be eligible for
an award. The Commission received
two comments supporting this proposed
change.11 One commenter stated that
many whistleblowers are often at or
beyond the 120-day period before
considering external reporting because
they wait for the outcome of the internal
investigation before reporting externally
and internal investigations often take
some time. This commenter also stated
that while 180 days is a substantial
improvement, an even longer time frame
would help ensure that well-intentioned
individuals receive full credit for their
information.12
The other commenter agreed that the
period of eligibility should be
lengthened to 180 days but urged the
Commission to state that the 180-day
period refers only to the whistleblower’s
‘‘look back’’ eligibility to retain original
source status and that whistleblowers
will not lose that status or eligibility for
an award if they perfect their
submission to the Commission after 180
days elapse. This commenter also urged
the Commission to revise Rule
165.2(l)(2) to include individuals who
first provide information to foreign
governments or self-regulatory
authorities because of the global nature
of the commodities markets and the
increasing number of international
whistleblowers participating in the
Dodd-Frank whistleblower programs.
This commenter went on to state that
there is no persuasive policy reason for
excluding such persons from original
source status because some of the
Commission’s recent enforcement cases
were brought with the cooperation of
foreign authorities and the proposed
rules allow for whistleblower awards
based on Related Actions by certain
foreign authorities. Hence, this
commenter argued that if
whistleblowers may receive awards
based on Related Actions undertaken by
foreign authorities, those
whistleblowers should be entitled to
original source eligibility in instances
where they report to a foreign authority
prior to reporting to the Commission.13
7 See
8 See
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11 See
TAF and MY comment letters.
MY comment letter.
13 See TAF comment letter.
12 See
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c. Final Rule
The Commission received no
comments regarding the proposed
revision in Rule 165.5(a)(3) that makes
clear that a claimant may receive an
award in a Covered Action, in a Related
Action, or both and, accordingly, is
adopting the amendment as proposed.
With respect to the proposed revision
to Rule 165.5(b), the Commission
believes that removing the requirement
that the whistleblower be the original
source of information received by the
Commission is consistent with Section
23(b)(1), and will prevent the potential
situation where a claimant reports
internally before providing information
to the Commission and the employer
self-reports the violation of the CEA,
thereby foreclosing the claimant’s
eligibility for an award because the
employer is the ‘‘original source’’ of the
information. The Commission is
adopting this amendment as proposed.
The Commission has also decided to
adopt as proposed Rule 165.5(c), which
clarifies that the Commission may waive
any procedural requirements upon a
showing of extraordinary circumstances.
After consideration of the comments
on Rule 165.2(l), the Commission has
decided to adopt the rule with one
change, a conforming change and a
minor correction. The Commission is
adding foreign futures authorities 14 to
the authorities and entities to which a
claimant may provide information prior
to filing a Form TCR and retain original
source status. This change is consistent
with the list of agencies and authorities
in Section 23(h)(2)(C) with which the
Commission can share information
received from a whistleblower if
necessary or appropriate to accomplish
the purposes of the Commodity
Exchange Act and protect customers.
The Commission understands that
individuals who are located outside the
United States might decide to approach
a local authority prior to providing
information to the Commission. As a
result, and in consideration of the global
nature of the futures and swaps markets
and the number of the Commission’s
recent enforcement actions that have
been undertaken with the cooperation of
foreign governments, the Commission
believes it is appropriate to expand the
list of entities in Rules 165.2(l)(1)(i) and
14 Section 1a(26) of the CEA defines foreign
futures authority as any foreign government, or any
department, agency, governmental body, or
regulatory organization empowered by a foreign
government to administer or enforce a law, rule, or
regulation as it relates to a futures or options matter,
or any department or agency of a political
subdivision of a foreign government empowered to
administer or enforce a law, rule, or regulation as
it relates to a futures or options matter.
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165.2(l)(2). In addition, the Commission
is adding registered entity and
registered futures association to, and
removing futures association from the
list of authorities in Rule 165.2(i)(2);
and adding registered entity and
registered futures association to Rule
165.2(l)(1)(i) in order to conform those
rules to existing language in Rules
165.4(a)(2) and 165.11 and to Section
23(h)(2)(C)(i). The Commission is
correcting a typographical error in Rule
165.2(l)(2) by removing ‘‘of any’’ and
correcting an omission by inserting
‘‘local’’ in the list of authorities in the
first sentence.
The Commission also clarifies that the
180-day timeframe in Rule 165.2(l)(2)
relates only to the date on which the
Commission will consider a
whistleblower’s original information to
have been received. Filing a Form TCR
more than 180 days after reporting
information to another authority does
not strip a whistleblower of original
source status or render a whistleblower
ineligible for an award. Also, the
Commission is amending Rule
165.2(i)(3) to extend the time from 120
to 180 days in order to conform that rule
to the extension of the timeframe in
Rule 165.2(1)(2).
Award Claims Review Under Rule 165.7
a. Proposed Rules
The Commission proposed several
changes to the award claims review
process under Rule 165.7 to better
define and specify each step in the
process. Those steps were spelled out in
proposed new paragraphs (f) through (l),
along with new provisions regarding
withdrawing award applications in
proposed paragraph (d) and disposition
of claims that do not relate to Notices
of Covered Actions (‘‘NCAs’’) or final
judgments in Related Actions in
proposed new paragraph (e). The
proposed amendments would establish
a review process similar to that
established under the SEC’s
whistleblower rules.15 Specifically, the
Commission proposed to discontinue
the Whistleblower Award
Determination Panel and replace it with
a review process handled by a Claims
Review Staff designated by the Director
of the Division of Enforcement in
consultation with the Executive
Director, with the Claims Review Staff
being assisted by the Whistleblower
Office staff within the Division of
Enforcement. The proposed rules also
would provide an additional means for
the submission of the required Form
WB–APP, Application for Award for
15 See
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Original Information Provided Pursuant
to Section 23 of the Commodity
Exchange Act, in Rule 165.7(b)(1);
explain the deadline for filing Form
WB–APP under different timing
scenarios for final judgments in covered
judicial or administrative actions and
Related Actions in proposed Rule
165.7(b)(3); and make a conforming
change by renumbering prior paragraph
(e) in Rule 165.7 as paragraph (l).
Proposed Rule 165.7(d) would permit
a claimant to withdraw an award
application at any point in the review
process by submitting a written request
to the Whistleblower Office.
Proposed Rule 165.7(e) addressed the
Commission’s experience of receiving a
number of Form WB–APPs that appear
to be unrelated to NCAs or final
judgments in Related Actions as well as
Form WB–APPs that do not relate to a
previously filed Form TCR. In order to
reduce the administrative burden on the
Commission, the Commission proposed
that such facially ineligible claims
primarily be handled by the
Whistleblower Office. The
Whistleblower Office would notify the
claimant of the deficiencies in the Form
WB–APP and provide an opportunity
for the claimant to correct the
deficiencies or withdraw the claim
before the finalization of the denial of
the claim. If the claimant does not
correct the deficiencies or withdraw the
claim, the Whistleblower Office would
notify the Claims Review Staff of the
proposed denial, which would be called
a Proposed Final Disposition, and any
member of the Claims Review Staff
would have the opportunity to request
review of the proposed denial. If no
member of the Claims Review Staff
requests review, the Proposed Final
Disposition would become the final
order of the Commission. If a member of
the Claims Review Staff requests review,
the Claims Review Staff would review
the record for the denial and either
remand to the Whistleblower Office for
further action or issue a final order of
the Commission, which consists of the
proposed denial.
In Rule 165.7(f), the Commission
proposed that the Claims Review Staff
would evaluate all timely award
applications submitted on a Form WB–
APP in response to the NCA or a final
judgment in a Related Action. During
the review process, the Whistleblower
Office may require that claimants
provide additional information,
explanation, or assistance as set forth in
Rule 165.5(b)(3). For award claims on
Related Actions, as proposed in Rule
165.7(f), the Whistleblower Office may
request additional information from the
claimant to demonstrate that the
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claimant voluntarily provided the
governmental agency, regulatory
authority, or self-regulatory organization
the same original information that led to
the Commission’s successful
enforcement action and the successful
enforcement of the Related Action. The
Whistleblower Office may also seek
assistance and confirmation from the
other agency in making this
determination.
In Rule 165.7(g)(1), the Commission
proposed that following the initial
evaluation by the Claims Review Staff,
the Claims Review Staff would issue a
Preliminary Determination setting forth
a preliminary assessment as to whether
the claim should be granted or denied
and, if granted, setting forth the
proposed award percentage amount.
The Whistleblower Office would send a
copy of the Preliminary Determination
to the claimant. The proposed
amendments would allow a claimant
the opportunity to contest the
Preliminary Determination.
In Rule 165.7(g)(2), the Commission
proposed that the claimant could take
any of the following steps in response
to a Preliminary Determination:
• Within thirty (30) calendar days of
the date of the Preliminary
Determination, the claimant may
request that the Whistleblower Office
make available for the claimant’s review
the materials that formed the basis of
the Claim Review Staff’s Preliminary
Determination.
• Within sixty (60) calendar days of
the date of the Preliminary
Determination, or if a request to review
materials is made, then within sixty (60)
days of the Whistleblower Office
making those materials available for the
claimant’s review, a claimant may
submit a written response setting forth
the grounds for the claimant’s objection
to either the denial of an award or the
proposed amount of an award. The
claimant may also include
documentation or other evidentiary
support for the grounds advanced in any
response, and request a meeting with
the Whistleblower Office. However,
such meetings would not be required.
The Whistleblower Office may in its
sole discretion decline the request.
Proposed Rule 165.7(h) provides that
if a claimant fails to submit a timely
response under new Rule 165.7(g), then
a Preliminary Determination denying an
award becomes the Final Order of the
Commission and constitutes a failure to
exhaust the claimant’s administrative
remedies. Failure to exhaust
administrative remedies would prohibit
the claimant from pursuing judicial
review.
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If the claimant fails to contest a
Preliminary Determination
recommending an award, the
Preliminary Determination would be
treated as a Proposed Final
Determination, which would make it
subject to Commission review under
proposed Rule 165.7(j).
Proposed Rule 165.7(i) describes the
procedure in cases where a claimant
submits a timely response under
proposed Rule 165.7(g). In such cases,
the Claims Review Staff would consider
the issues raised in the claimant’s
response, along with any supporting
documentation that the claimant
provided, and prepare a Proposed Final
Determination.
In Rule 165.7(j), the Commission
proposed that when there is a Proposed
Final Determination, the Whistleblower
Office would notify the Commission of
the Proposed Final Determination.
Within thirty (30) days of that
notification, any Commissioner may
request Commission review of the
Proposed Final Determination. If no
Commissioner makes such a request, the
Proposed Final Determination would
become the Commission’s Final Order.
If a Commissioner does request review,
the Commission would review the
record that the Claims Review Staff
relied upon in reaching its
determination. On the basis of its review
of that record, the Commission would
issue its Final Order, which the Office
of the Secretariat would then serve on
the claimant. In reaching their
decisions, the Commission and Claims
Review Staff would only consider
information in the record.
The Office of General Counsel would
review both preliminary and proposed
final determinations prior to issuance,
and no such determination may be
issued without the Office of General
Counsel’s determination of legal
sufficiency.
In Rule 165.15(a)(2), the Commission
proposed that the Enforcement Director,
in consultation with the Executive
Director, would designate a minimum of
three and a maximum of five staff from
the Division of Enforcement or other
Commission Offices or Divisions to
serve on the Claims Review Staff, either
on a case-by-case basis or for fixed
periods. At least one person from
outside the Division of Enforcement
would be included on the Claims
Review Staff at all times. The Claims
Review Staff would be composed only
of persons who have not had direct
involvement with the underlying
enforcement action. Due to the Office of
General Counsel’s role in the review
process, the Commission believes it is
appropriate to exclude staff from that
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Office from serving as Claims Review
Staff.
b. Comments Received
The Commission received two
generally supportive comments
regarding the proposed additions and
changes to the award review process.16
One commenter stated that having
dedicated staff for award determinations
would be beneficial and urged the
Commission to publish NCAs for
Related Actions that the Commission
knows emanated from the information
provided by the whistleblower.17 The
other commenter reasoned that the
proposed changes in the process allow
whistleblowers to better understand the
reasons for a particular award or denial
and to make informed requests for
reconsideration, and that the proposed
changes offer greater transparency in the
awards process and will likely obviate
the need for some appeals.18
c. Final Rule
After consideration of the comments
received, the Commission has decided
to adopt Rule 165.7 as proposed. The
Commission anticipates that these
revisions will provide the public and
claimants with greater transparency in
the awards claim review process and
enhance the expeditious and fair
administration of the program. The
Commission declines a commenter’s
request that the Commission publish
NCAs for Related Actions. The
Commission believes that doing so
would be unworkable and burdensome
for the Commission. Publishing NCAs
on all criminal and civil actions that
may become Related Actions would
require staff to track, monitor, and
report on many actions that are not
Commission actions. Rule 165.7(b)(3)
clearly describes how and when actions
brought by other agencies become
Related Actions and when a claimant
must file a Form WB–APP with the
Commission to apply for an award in
connection with these actions. It is the
claimant’s responsibility to track the
outcome of a Related Action if the
claimant has an interest in pursuing an
award application based on that Related
Action.
In response to the comment on the
nature of the Claims Review staff, the
Commission notes that the Claims
Review Staff will be drawn from the
Commission’s Divisions and Offices,
other than the Office of General
Counsel. As detailed in Rule 165.7, the
role of Claims Review Staff is primarily
16 See
GS2Law and TAF comment letters.
GS2Law comment letter.
18 See TAF comment letter.
17 See
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to make preliminary decisions on the
merits of award applications including,
if applicable, award amounts.19 Service
by a Commission employee on the
Claims Review Staff will be in addition
to the other duties of the employee in
their Division or Office. As is the case
at the SEC, the Claims Review Staff will
be assisted by staff from the
Whistleblower Office who will assemble
the factual record related to an award
claim, provide analysis of an award
claimant’s eligibility and, if applicable,
make a recommendation of a proposed
award amount.
sradovich on DSK3GMQ082PROD with RULES
Awards for Related Actions
a. Proposed Rules
For award claims on Related Actions,
the Commission proposed to amend
Rule 165.11 to permit claimants who are
eligible to receive an award in a covered
judicial or administrative action to also
receive an award based on the monetary
sanctions that are collected from a final
judgment in a Related Action. The
exception would be that the
Commission would not make an award
to a claimant for a Related Action if the
claimant has been granted an award by
the SEC for the same action under the
SEC’s whistleblower program. This
would prevent a claimant from ‘‘double
dipping’’ and receiving more than one
award for the same action. Similarly, if
the SEC has previously denied an award
to a claimant in a Related Action, the
claimant would be precluded from
relitigating any issues before the
Commission that the SEC resolved
against the claimant as part of the SEC’s
award denial. The limitations on
obtaining an award for both Covered
Actions and final judgments in Related
Actions are similar to those imposed by
the SEC in its whistleblower program.
A Related Action under Rule 165.2(m)
is based on the original information
voluntarily submitted by a
whistleblower to the Commission that
led to the successful enforcement of a
Commission action, and therefore, an
action may only become a Related
Action after there is a successful
Commission action. The Commission
accordingly proposed revisions to
clarify timing requirements for filing
whistleblower award claims regarding
Related Actions. The proposed revisions
were intended to clarify that, except in
the circumstances described in
proposed Rule 165.7(b)(3)(ii), award
claims for a Related Action shall be filed
within 90 days after an action meets the
19 The Commission will have an opportunity to
review preliminary denial decisions that are
contested by the claimant and all award
recommendations. See Rule 165.7(j).
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definition of Related Action if the order
in the Related Action was issued prior
to the successful enforcement of a
Commission action. The proposed
revisions also clarify that award claims
for a Related Action and in response to
a Notice of Covered Action may be
submitted on the same Form WB–APP
in certain circumstances.
b. Comments Received
The Commission received one
comment regarding Proposed Rule
165.11. The commenter expressed some
confusion as to whether the information
provided by a whistleblower must be
presented to the Commission prior to
presenting the information to another
authority in order for a whistleblower to
be eligible for an award in a Related
Action.20 The commenter stated that the
Commission should clarify that
whistleblowers who first take their
information to another authority and
later provide their information to the
Commission are eligible for an award.
c. Final Rule
The Commission has decided to adopt
Rule 165.11 as proposed. The
Commission also takes this opportunity
to clarify that a whistleblower retains
eligibility under Rule 165.11, Rule
165.5, and Rule 165.2(l) for an award
based on information provided by the
whistleblower to another authority prior
to the time that the whistleblower
provided the information to the
Commission.
Contents of Record for Award
Determinations
a. Proposed Rules
The Commission proposed to amend
Rule 165.10(a) to identify additional
items that may be included in the
contents of record for award claims as
a result of the Commission’s proposal to
amend Rule 165.11 to permit claimants
who are eligible to receive an award in
a covered judicial or administrative
action to also receive an award based on
the monetary sanctions that are
collected from a final judgment in a
Related Action. For Related Actions,
any documents or materials, including
sworn declarations from third parties,
that are received or obtained by the
Whistleblower Office to assist the
Commission in resolving the claimant’s
award application, including
information relating to the claimant’s
eligibility, may be included in the
record. In addition, any information
provided to the Commission by the
entity bringing the Related Action that
has been authorized by the entity for
20 See
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24491
sharing with the claimant may be part
of the record. Neither of these types of
information may be relied upon by the
Commission or the Claims Review Staff
in making a decision on a whistleblower
award claim or included in the contents
of the record if the entity did not
authorize the Commission to share the
information with the claimant.
The Commission also proposed
revisions to Rules 165.10(b) and
165.13(b) to clarify that the record on
appeal shall not include any predecisional or internal deliberative
process materials that are prepared to
assist the Commission or Claims Review
Staff in deciding a claim.
b. Comments Received
The Commission received one
comment regarding the record for award
determinations and appeals. This
commenter strongly urged the
Commission to further revise Proposed
Rules 165.10 and 165.13 to not
categorically exclude from the record
pre-decisional and internal deliberative
process materials prepared to assist the
Commission in award determinations,
and suggested that the Commission
would be denying whistleblowers a
meaningful right to appeal by defining
by rule what constitutes the record.21
c. Final Rule
Following consideration of the
comments received, the Commission
has decided to adopt the revisions to
Rules 165.10(a) and (b) and 165.13(b) as
proposed. The Commission disagrees
with the comment that the Commission
defining by rule what constitutes the
record denies a claimant a meaningful
right to appeal award determinations.22
Under Rules 165.10 and 165.13, all
factual materials relied on by Claims
Review Staff or the Commission in
making an award determination will be
available to the claimant and reviewing
court. The Commission believes that
pre-decisional or internal deliberative
process materials that are prepared to
assist the Commission or Claims Review
Staff from the record are protected by
attorney-client privilege as well as
attorney work product under well
21 See
TAF comment letter.
an example, the commenter referred to
appeals of IRS whistleblower cases (Insinga v.
Commissioner, Tax Court Docket No. 9011–13W
(July 27, 2016) and Whistleblower One 10683–13W
et al. v. Commissioner, 145 T.C. No. 8 (September
16, 2015)) in which the whistleblower sought
factual information in the underlying enforcement
cases to determine whether the information the
whistleblower provided the IRS contributed to the
success of the enforcement action. The Commission
believes its practice is distinguishable in that all of
the facts that underlie the Commission’s decision
are included in the record under Rules 165.10 and
165.13.
22 As
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settled law. Similarly, the exclusion of
any documents or materials provided by
a third-party that have not been
authorized for release by the third-party
does not deny the claimant due process
because these materials will not be
considered by the Commission or
Claims Review Staff in reaching a
decision on the award claim.
Authority To Administer the Program
a. Proposed Rule
The Commission proposed to directly
assign responsibilities for administering
the program by rule rather than by
delegation in Rule 165.15 in light of the
proposed changes to the claims review
process. Since 2013, the Whistleblower
Office has been located within the
Division of Enforcement. The
Commission believes that it is
appropriate to assign overall
responsibility for administering the
whistleblower program to the Director
of the Division of Enforcement. The
Commission notes that this approach is
consistent with the SEC’s practice.
The Commission also proposed to
directly assign responsibility to Claims
Review Staff for the issuance of
Preliminary Determinations and
Proposed Final Determinations, and
issuance of Proposed Final Dispositions
to the WBO. In this connection, the
Commission proposed, again consistent
with the SEC’s practice, that no member
of the Claims Review Staff can have had
any direct involvement in the
underlying enforcement case.
b. Comments Received
The Commission received no
comments regarding the proposed
changes to the authority to administer
the whistleblower program.
c. Final Rule
The Commission has decided to adopt
the revisions to the authority to
administer the program as proposed.
sradovich on DSK3GMQ082PROD with RULES
Whistleblower Identifying Information
a. Proposed Rule
Rule 165.4 implements the
confidentiality protections for
whistleblower identifying information
contained in Section 23(h)(2). In
proposed Rule 165.15(a)(3), the
Commission proposed to authorize the
Director of the Division of Enforcement
to act on its behalf to disclose
whistleblower identifying information
as permitted by Section 23(h)(2)(C) and
Rule 165.4(a)(2) and (3). The
Commission stated in the Proposal that
it expects the Director of Enforcement to
exercise this discretion to release such
sensitive information in a manner
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consistent with, and when deemed
necessary or appropriate to accomplish,
the customer protection and law
enforcement goals of the whistleblower
program. The Commission said in the
Proposal that it believes that this
delegation of authority will increase
investor protection by facilitating
administration of the whistleblower
program as well as investigations and
actions by those agencies and
authorities that are eligible to receive
whistleblower identifying information
under Section 23(h)(2)(C) and Rule
165.4. Any agency or authority that
receives whistleblower identifying
information is bound by the same
confidentiality requirements as those
applicable to the Commission under
Section 23(h)(2)(A) and such sharing of
information does not change the
confidential nature of the information.
Certain information provided to other
agencies or authorities is also protected
from disclosure under Section 8 of the
CEA. The Commission also proposed to
revise a question in the Form TCR,
question E.8, seeking consent from
whistleblowers to share their
information with other authorities.
b. Comments Received
The Commission received one
comment opposing the proposed
changes to Rule 165.4 and Form TCR.
The commenter viewed the proposed
changes as a ‘‘loosening’’ of the
confidentiality of a whistleblower’s
identity. In addition, the commenter
suggested that: (1) A whistleblower
should be entitled to know the other
agencies with which identifying
information is shared; (2) the scope of
the proposal on sharing the
whistleblower’s identifying information
is too broad; and, (3) the Commission
does not have the ability to monitor or
enforce confidential treatment of the
whistleblower’s identifying information
once it has been shared with other
agencies. The commenter also suggested
that the whistleblower should be
consulted by the Commission prior to
any sharing of the whistleblower’s
identifying information with other
agencies and provided the opportunity
to prevent such sharing because the
whistleblower may have reported to the
Commission rather than to another
authority as the result of previous
encounters with personnel at other
agencies that left the whistleblower with
less trust or confidence in those
agencies. Finally, the commenter argued
that the sharing of information with selfregulatory organizations is too broad
because the term ‘‘self-regulatory
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organization’’ is not properly defined in
the rules.23
c. Final Rule
After consideration of the comment
received, the Commission is adopting
Rule 165.4(a)(2) as proposed, with a
minor change. Section 23(h)(2)(C)
provides the Commission with the
authority to share all information
provided by the whistleblower with the
authorities listed in that section without
the consent or consultation of the
whistleblower, subject to the limitation
that providing the whistleblower’s
identifying information is necessary or
appropriate to accomplish the purposes
of the CEA and protect customers.
Reassigning the authority to make the
decision to disclose whistleblower
identifying information in a manner
permitted by Section 23(h)(2)(C) from
the Director of the Whistleblower Office
to a more senior Commission official,
the Director of the Division of
Enforcement, is not a loosening of
whistleblower identity protections. The
Commission believes that this
delegation of authority will increase
investor protection by facilitating
administration of the whistleblower
program as well as investigations and
actions by those agencies and
authorities that are eligible to receive
whistleblower identifying information
under Section 23(h)(2)(C) and Rule
165.4. Section 23(h)(2)(C)(i), Rule
165.4(a)(2), and the Privacy Act Notice
on Form TCR identify for
whistleblowers the entities with which
whistleblower identifying information
may be shared. If a potential
whistleblower is not comfortable with
the possibility that confidential
information about them may be shared
with one or more of these entities, the
potential whistleblower can decide not
to file a Form TCR.
The Commission does not believe that
Commission monitoring of the treatment
of confidential whistleblower
information by a receiving authority is
necessary. As the commenter pointed
out, receiving authorities are bound by
the same confidentiality provisions as
the Commission. The Commission
makes sure that a receiving authority
understands these limitations when it
shares confidential whistleblower
information with them. Further, all of
the entities with which the Commission
may share confidential information are
experienced in handling and protecting
confidential information such as
whistleblower identifying information.
The Commission does not agree with
the commenter’s assertion that ‘‘self23 See
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regulatory organization’’ is not defined.
Section 23(h)(2)(C)(i)(III) limits the selfregulatory organizations with which
confidential whistleblower information
can be shared to those self-regulatory
organizations that fit within the
definition in section 3(a) of the
Securities Exchange Act of 1934.24 This
is the meaning of ‘‘self-regulatory
organization’’ throughout Section 23 of
the CEA and the part 165 Rules. To
eliminate any confusion in this regard,
the Commission is making conforming
amendments throughout the Part 165
Rules to clarify that a self-regulatory
organization is a self-regulatory
organization as defined by section 3(a)
of the Securities Exchange Act of 1934.
Finally, in light of the comments, the
Commission also has determined to
remove Question E.8 on Form TCR. The
wording of this question was not
consistent with the authority granted to
the Commission to share whistleblower
identifying information in Section
23(h)(C)(i) and the language of Rule
165.4(a)(2). The Privacy Act Notice in
Form TCR puts potential whistleblowers
on notice that the information that they
provide to the Commission may be
shared with other authorities.
sradovich on DSK3GMQ082PROD with RULES
Retaliation Against Whistleblowers
a. Proposed Rule
In the Proposal, the Commission
proposed several substantial changes to
its anti-retaliation authority. The
Commission proposed revisions to Rule
165.19 and appendix A, and the
addition of new Rule 165.20. The
Commission proposed to amend Rule
165.19 to prohibit a person from taking
any action to impede an individual from
communicating directly with the
Commission’s staff about a possible
violation of the CEA, including by
enforcing, or threatening to enforce, a
confidentiality agreement or predispute
arbitration agreement with respect to
such communications. The Commission
also proposed to revise its 2011
interpretation that it lacked statutory
authority to bring an enforcement action
against an employer that retaliated
against a whistleblower. The
Commission proposed that Sections
6(c), 6(d), 6b, 6c, and 23(i) of the CEA
allow the Commission to pursue such
violations of the Act through an
enforcement action. The Commission
proposed Rule 165.20 to make clear that
Section 23(h)(1)(A) of the CEA,
including the rules in part 165
promulgated thereunder, is enforceable
in an action or proceeding brought by
the Commission. Proposed Rule
165.20(c) provides that the antiretaliation protections apply
irrespective of whether a whistleblower
qualifies for an award. The Commission
also proposed changes to appendix A to
reflect the Commission’s ability to bring
enforcement actions to prosecute
violations of the anti-retaliation
prohibition of Section 23(h)(1)(A).
b. Comments Received
The Commission received several
comments regarding the proposed
revisions to the anti-retaliation
provisions. The Commission received
one comment letter that addressed the
proposed revisions to Rules 165.19(b),
165.20(b) and 165.20(c) 25 and another
comment letter focused on proposed
Rule 165.20(c).26
The comment on Rule 165.19(b)
supported the proposal and noted that
this change will more closely align the
Commission with the SEC with respect
to combating the chilling of
whistleblowing by employers who
require waivers of rewards in severance
packages for whistleblowing.
This commenter was similarly
supportive of the proposed expansion of
Commission enforcement authority to
address retaliation against
whistleblowers. This commenter noted
that more substantial penalties or a
government enforcement action would
be more apt to deter retaliation against
whistleblowers than only a private right
of action.
Both commenters asked the
Commission to clarify its position on
proposed Rule 165.20(c) with regard to
taking enforcement action against
employers that retaliate against
whistleblowers prior to the
whistleblower filing a Form TCR with
the Commission. One commenter
reiterated the point that many
whistleblowers await the outcome of
any internal investigation before
providing the Commission any
information.27 In the commenter’s view,
it would not be fair or in the public
interest to leave such a whistleblower
unprotected during this interim period
between reporting internally and filing
a Form TCR with the Commission. This
commenter further explained that the
Commission taking enforcement action
when companies or individuals retaliate
against whistleblowing activity prior to
the filing of a Form TCR will create
additional incentives for employees to
report internally before providing
information to the Commission.
25 See
MY comment letter.
MY and TAF comment letters.
27 See MY comment letter.
26 See
24 15
U.S.C. 78c(a).
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24493
c. Final Rule
Having considered the fully
supportive comment on Rules 165.19(b)
and 165.20(b), the Commission is
adopting these rules as proposed. The
Commission is also re-organizing and
making minor changes to proposed
Appendix A to better reflect the fact that
either the Commission or a private
litigant can bring an action for a
violation of Section 23(h)(1)(A).
By adopting proposed Rule 165.20(b),
the Commission is confirming its
decision to revise its 2011 interpretation
that it lacks the statutory authority to
bring an enforcement case against an
employer that violates the antiretaliation prohibition in Section
23(h)(1). The 2011 interpretation failed
to fully consider the statutory context of
Section 23 and other CEA provisions.
The 2011 interpretation does not
comport with Section 23(h)(1)(A)’s
prohibition against retaliation; the
Commission’s broad rulemaking
authority under Section 23(i); and, the
Commission’s general authority to
prosecute violations of any CEA
provision (including Section
23(h)(1)(A)) as well as violations of the
Commission’s rules and orders under
CEA sections 6(c), 6(d), 6b and 6c.
Sections 6(c), 6(d), 6b and 6c of the Act
empower the Commission to take
actions for the violation of ‘‘any’’ CEA
provision or rule or regulation
thereunder. Although Section
23(h)(1)(B) provides a private right of
action, nothing in that sub-section
purports to limit the Commission’s
general enforcement authority or
suggests that the private right of action
is exclusive.
With regard to Rule 165.20(c), the
Commission has decided, after
considering the comments received, to
adopt it with some modification. The
Commission believes these revisions
will further encourage whistleblowers to
report internally28 as well as deter
retaliatory practices against
whistleblowers.
It would be inconsistent for the
Commission to encourage internal
reporting by whistleblowers and not
extend to them anti-retaliation
28 The part 165 Rules encourage whistleblowers
to report internally prior to reporting to the
Commission. Rule 165.2(l)(2), discussed above,
allows a whistleblower to retain original source
status after reporting internally. Additionally, Rule
165.9(b)(4) includes in the factors that may increase
the amount of an award whether and the extent to
which a whistleblower reported the possible
violations through internal whistleblower, legal, or
compliance procedures before or at the same time
as reporting those violations to the Commission,
and whether and the extent to which a
whistleblower assisted any internal investigation or
inquiry concerning the reported violations.
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protections to the extent the CEA
permits. To do so would place
whistleblowers who report internally in
a worse position than whistleblowers
who do not report internally prior to
reporting to the Commission, forcing
whistleblowers to choose between
reporting internally first in the hopes of
increasing any award or foregoing
reporting internally in order to preserve
anti-retaliation protections.
However, the anti-retaliation
protections in the CEA do not extend to
all whistleblowers who report
internally. Section 23(h) and Rule
165.20(a) provide that the whistleblower
in a private action or the Commission in
an enforcement action must be able to
show that retaliation occurred because
of any lawful act done by the
whistleblower in providing information
to the Commission in accordance with
the part 165 rules, or assisting in any
investigation or judicial or
administrative action of the Commission
based upon or related to such
information. The ability to make this
showing will depend on the facts and
circumstances of a particular case.
Actions that an employer took after a
whistleblower reported internally but
before providing information to the
Commission may be relevant to whether
retaliation that is prohibited under
Section 23(h)(1) occurred. For this
reason, the Commission is adding
language to Rule 165.20(b) to explicitly
recognize this possibility.
Payment of Awards
sradovich on DSK3GMQ082PROD with RULES
a. Comment Received
The Commission proposed no
revisions to Rule 165.14 on the payment
of awards. However, the Commission
received one comment regarding the
payment of awards.29 This commenter
noted that the current part 165 Rules do
not make available the payment of the
minimum amount of an award (10%)
until the whistleblower’s time to appeal
has expired, and suggested that the rules
be amended to provide for payment of
the minimum amount of an award at the
time the order of award is issued. This
commenter argued that once an award
has been ordered by the Commission,
the Commission has admitted that there
is an entitlement to an award and the
Commission is estopped from later
removing an award during the appeal
process. In addition, this commenter
stated that often the elapsed time
between the whistleblower’s original tip
and any award is measured in years, not
weeks or months, and that waiting on
29 See
GS2Law comment letter.
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the resolution of any appeals would
only lengthen that timeframe.
b. Final Rule
The Commission declines the request
to amend Rule 165.14 to permit
payment of any portion of an award
prior to the completion of the appeals
process for all whistleblower award
claims arising from a NCA or Related
Action.
Section 23(f)(2) provides that the
Commission’s determination to whom
to pay an award and the amount of any
award is appealable to the appropriate
U.S. Court of Appeals. In response to an
appeal from a whistleblower who
received no award from the Commission
or who disagreed with the amount of a
Commission award, a Court of Appeals
could set aside the Commission’s
decision to make an award to another
whistleblower under the same NCA or
Related Action if that award decision
does not meet the applicable standard of
review.30 This possibility makes it
prudent for the Commission to refrain
from paying any portion of an award
until the completion of the appeals
process for all whistleblower award
claims arising from an NCA or a Related
Action as provided in Rule 165.14(b)(2).
As a result, the Commission is not
making any changes to Rule 165.14 in
response to the comment.
Office of Consumer Outreach
a. Amendment
The office formerly known as the
Office of Consumer Outreach has
changed its name to the Office of
Customer Education and Outreach. The
Commission is renaming the Office in
Rule 165.12. Because Rule 165.12 is a
rule of the Commission’s ‘‘organization,
procedure or practice’’ the Commission
need not present this revision for notice
and comment.31
Conforming and Technical
Amendments
a. Proposed Amendments
To conform to the proposed changes
to Rules 165.7 and 165.15, the
Commission proposed to strike the
reference to ‘‘or its delegate’’ in Rule
165.11 in the undesignated material
before paragraph (a).
The Commission proposed to amend
Rule 165.2(i)(2) concerning the
definition of information that led to a
successful enforcement action because it
contains an erroneous cross-reference.
The reference is intended to be to
30 7 U.S.C. 26(f)(3) states that the court shall
review the determination made by the Commission
in accordance with section 706 of title 5.
31 See 5 U.S.C. 553.
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165.2(l) regarding the definition of
original source. The rule currently refers
to paragraph (i) of this section.
The Commission proposed to make a
minor change to the wording of Rule
165.3 concerning the procedures for
submitting original information because
it contains an erroneous reference to a
two-step process. This change makes the
language conform to the process
previously adopted.32
The Commission proposed to amend
Rule 165.13(b) concerning appeals
because it contains an erroneous crossreference. The reference intended is to
Rule 165.10 regarding contents of the
record, rather than Rule 165.9 regarding
criteria for determining award amounts.
The Commission proposed to move
and include updated Form TCR and
Form WB–APP in a new appendix B to
part 165. The updated Form TCR and
Form WB–APP include revisions that
previously received information
collection requirement approval by the
Office of Management and Budget.33
The Commission also proposed
revisions to the submission instructions
portions of the forms to conform to the
proposed revisions in the part 165
Rules.
Finally, the Commission proposed to
make a minor change in the wording of
current § 165.7(e), in addition to
designating current paragraph (e) as new
paragraph (l).
b. Comments Received
The Commission received no
comments regarding the proposed
conforming and technical amendments.
c. Final Rules
The Commission has decided to adopt
the conforming and technical
amendments as proposed.
III. Related Matters
A. Regulatory Flexibility Certification
The Regulatory Flexibility Act 34
requires that agencies consider whether
the rules they propose will have a
significant economic impact on a
substantial number of small entities
and, if so, provide a regulatory
flexibility analysis respecting the
impact.35 In the Commission’s
Proposing Release, the Chairman, on
behalf of the Commission, certified that
32 Whistleblower Incentives and Protection, 76 FR
at 53183 (Aug. 25, 2011) (explaining that the rule
was adopted with a more streamlined process and
one less form than the original proposal).
33 The Form TCR and Form WB–APP OMB
Control Number is 3038–0082. Both forms last
received OMB approval on April 8, 2015, with an
expiration date of April 30, 2018.
34 5 U.S.C. 601, et seq.
35 Id.
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a regulatory flexibility analysis is not
required because the persons that would
be subject to the rules—individuals—are
not ‘‘small entities’’ for purposes of the
Regulatory Flexibility Act and the rules
therefore would not have a significant
economic impact on a substantial
number of small entities. The
Commission received no comments
regarding this conclusion.
sradovich on DSK3GMQ082PROD with RULES
B. Paperwork Reduction Act
The Paperwork Reduction Act (PRA),
44 U.S.C. 3501–3521, imposes certain
requirements on federal agencies
(including the Commission) in
connection with their conducting or
sponsoring any collection of
information as defined by the PRA. The
Commission believes that the
amendments will not impose new
recordkeeping or information collection
requirements that require approval by
the Office of Management and Budget
under the PRA.
C. Cost-Benefit Considerations
CEA Section 15(a) requires the
Commission to consider the costs and
benefits of its actions before
promulgating a regulation under the
CEA or issuing certain orders.36 Section
15(a) further specifies that the costs and
benefits shall be evaluated in light of the
following five factors: (1) Protection of
market participants and the public; (2)
efficiency, competitiveness, and
financial integrity of futures markets; (3)
price discovery; (4) sound risk
management practices; and (5) other
public interest considerations. The
Commission considers the costs and
benefits resulting from its discretionary
determinations with respect to the
Section 15(a) factors. The Commission
may in its discretion give greater weight
to any one of the five enumerated areas
and could in its discretion determine
that, notwithstanding its costs, a
particular rule is necessary or
appropriate to protect the public interest
or to effectuate any of the provisions or
accomplish any of the purposes of the
CEA.
Since the basic framework of part 165
remains substantially unchanged, the
Commission believes that the costs and
benefits of the rule amendments and the
status quo baseline (the current rule), to
which the rules’ costs and benefits are
compared, are similar, but with certain
additional benefits attendant to these
amendments.37 The Rule 165.7
amendments will add transparency to
36 7
U.S.C. 19(a).
Commission believes that there is not
likely to be any material difference between the
amendments and the status quo baseline in terms
of cost.
37 The
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the Commission’s process of deciding
whistleblower award claims and will
harmonize the Commission’s rules with
those of the SEC. The amendments
clarify each step of the process that a
whistleblower must follow when
making an award claim. The
Commission believes that such
transparency and harmonization will
increase the benefits of the part 165
Rules relative to the benefits of the
current rules because potential
whistleblowers will have greater clarity
about the claims and awards process
and greater assurance that retaliation
will not be tolerated. The Commission
believes this clarity and protection will
encourage whistleblowers to step
forward. Thus, the rules should enhance
protection of market participants and
the public as well as market integrity
without materially adding to the costs
attendant to the current regime.
The Rule 165.4 and 165.15
amendments assign to the Director of
the Division of Enforcement the
authority to administer the
whistleblower program and release
whistleblower identifying information.
Since these amendments relate solely to
the Commission’s allocation of authority
among its staff, the Commission believes
that these changes will impose no
material costs on market participants or
the public. At the same time, the
Commission believes the protection of
market participants and the public will
be enhanced through a more effective
and efficient deployment of staff
resources.
The Rule 165.19 and 165.20
amendments clarify the anti-retaliation
protections available under the
Commission’s whistleblower program in
light of the Commission’s
reconsideration of its authority under
Section 23(h)(1) in conjunction with
Sections 6(c), 6(d), 6b, 6c, and 23(i) of
the CEA. These changes remove any gap
in enforcement authority between the
Commission and the SEC with regard to
whistleblower protections against
retaliation. The Commission believes
that these changes will impose no
material costs on market participants or
the public. The rules do not impose any
new regulatory burden.38 To comply
with the rules, market participants must
refrain from engaging in conduct that is
already subject to private rights of
action, or including certain provisions
waiving rights and remedies or
requiring arbitration of disputes in
employment agreements. The
38 The Commission believes that the new rule
provision regarding Commission enforcement does
not significantly affect any reliance interests
because the provision relates to conduct that is
already prohibited by Section 23 of the CEA.
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24495
Commission further believes that the
rules will have a positive effect on
efficiency, competitiveness, and
financial integrity of the markets that
the Commission regulates through
improving detection and remediation of
potential violations of the CEA and
Commission regulations. For instance,
market participants may be further
deterred from engaging in violations of
the CEA and Commission rules because
the likelihood of being caught has
increased due to improvements to the
whistleblower program that encourage
more whistleblowers to provide
information to the Commission.
The Commission believes that price
discovery and sound risk management
practices will not be materially affected
by the amendments. Also, the
Commission has not identified any
other relevant public interest
considerations.
The Commission invited public
comment on its cost-benefit
considerations, including the Section
15(a) factors described above.
Commenters were invited to submit any
data or other information that they had
that quantified or qualified the costs and
benefits of the Proposal. None of the
commenters submitted any data or other
information that quantified or qualified
the costs and benefits of the proposed
rules, nor did they otherwise comment
on the cost-benefit considerations as
stated in the proposed rules.
Alternatives Suggested by Commenters
The Commission adopts several
alternatives and makes certain
clarifications as suggested by
commenters to the proposal:
• After consideration of the
comments on Rule 165.2(l), the
Commission adopts the rule with one
change and a correction. The
Commission is adding foreign futures
authorities to the authorities and
entities to which a claimant may
provide information prior to filing a
Form TCR and retain original source
status.
• The Commission clarifies that the
180-day timeframe in Rule 165.2(l)(2)
relates only to the date on which the
Commission will consider a
whistleblower’s original information to
have been received. Filing a Form TCR
more than 180 days after reporting
information to another authority does
not strip a whistleblower of original
source status or render a whistleblower
ineligible for an award.
• The Commission is adopting Rule
165.4(a)(2) as proposed, with a minor
change. Section 23(h)(2)(C)(i), Rule
165.4(a)(2), and the Privacy Act Notice
on Form TCR identify for
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whistleblowers the entities with which
whistleblower identifying information
may be shared.
• Section 23(h)(2)(C)(i)(III) limits the
self-regulatory organizations with which
confidential whistleblower information
can be shared to those self-regulatory
organizations that fit within the
definition in section 3(a) of the
Securities Exchange Act of 1934.39 The
Commission is making conforming
amendments throughout the part 165
Rules to clarify that a self-regulatory
organization is a self-regulatory
organization as defined by section 3(a)
of the Securities Exchange Act of 1934.
• The Commission has determined to
remove Question E.8 on Form TCR. The
wording of this question was not
consistent with the authority granted to
the Commission to share whistleblower
identifying information in Section
23(h)(C)(i) and the language of Rule
165.4(a)(2). The Privacy Act Notice in
Form TCR puts potential whistleblowers
on notice that the information that they
provide to the Commission may be
shared with other authorities.
• The Commission has decided to
adopt Rule 165.20(c) with some
modification. The anti-retaliation
protections in the CEA do not extend to
all whistleblowers who report
internally. Actions that an employer
took after a whistleblower reported
internally but before providing
information to the Commission may be
relevant to whether retaliation that is
prohibited under Section 23(h)(1)
occurred. For this reason, the
Commission is adding language to Rule
165.20(b) to explicitly recognize this
possibility.
The Commission also received
alternatives to the final rule from
commenters that it chooses not to adopt:
• The Commission does not elect to
extend the deadline beyond 180 days
under 165.2(l) to retain status as the
original source of information after first
submitting the information to Congress,
any federal or state authority, a
registered entity, a registered futures
association, a self-regulatory
organization, or to any persons
described in paragraphs (g)(4) and (5) of
Rule 165.2 to be eligible for an award.
The Commission believes that 180 days
provides ample time for a whistleblower
to provide information to the
Commission after submitting the
information to any of the
aforementioned entities or authorities.
• The Commission declines a
commenter’s request that the
Commission publish NCAs for Related
Actions. The Commission believes that
39 Infra,
footnote 24.
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doing so would be unworkable and
burdensome for the Commission.
Publishing NCAs on all criminal and
civil actions that may become related
actions would require staff to track,
monitor, and report on many actions
that are not Commission actions.
• The Commission has chosen not to
further revise Proposed Rules 165.10
and 165.13 to not categorically exclude
from the record pre-decisional and
internal deliberative process materials
prepared to assist the Commission in
award determinations. Under Rules
165.10 and 165.13, all factual materials
relied on by Claims Review Staff or the
Commission in making an award
determination will be available to the
claimant and reviewing court. The
Commission believes that pre-decisional
or internal deliberative process
materials that are prepared to assist the
Commission or Claims Review Staff are
protected by attorney-client privilege as
well as attorney work product under
well settled law. Similarly, the
exclusion of any documents or materials
provided by a third-party that have not
been authorized for release by the thirdparty does not deny the claimant due
process because these materials will not
be considered by the Commission or
Claims Review Staff in reaching a
decision on the award claim.
• The Commission declines the
request to amend Rule 165.14 to permit
payment of any portion of an award
prior to the completion of the appeals
process for all whistleblower award
claims arising from a NCA or related
action. Section 23(f)(2) provides that the
Commission’s determination to whom
to pay an award and the amount of any
award is appealable to the appropriate
U.S. Court of Appeals. In response to an
appeal from a whistleblower who
received no award from the Commission
or who disagreed with the amount of a
Commission award, a Court of Appeals
could set aside the Commission’s
decision to make an award to another
whistleblower under the same NCA or
Related Action if that award decision
does not meet the applicable standard of
review.40 This possibility makes it
prudent for the Commission to refrain
from paying any portion of an award
until the completion of the appeals
process for all whistleblower award
claims arising from an NCA or a related
action as provided in Rule 165.14(b)(2).
• The Commission does not believe
that Commission monitoring of the
treatment of confidential whistleblower
information by a receiving authority is
necessary. Receiving authorities are
bound by the same confidentiality
40 Infra,
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D. Antitrust Considerations
Section 15(b) of the CEA requires the
Commission to consider the public
interests protected by the antitrust laws
and to take actions involving the least
anti-competitive means of achieving the
objectives of the CEA. The Commission
believes that the rules may have a
positive effect on competition through
improving detection, deterrence, and
remediation of potential violations of
the CEA and Commission regulations.
The Commission did not receive any
comments on any antitrust
considerations arising from the
proposed amendments.
E. Small Business Regulatory
Enforcement Fairness Act
Under the Small Business Regulatory
Enforcement Fairness Act of 1996
(SBREFA), Pub. L. 104–121 (March 29,
1996), as amended by Pub. L. 110–28
(May 25, 2007), the Commission solicits
data to determine whether a proposed
rule constitutes a ‘‘major’’ rule. Under
SBREFA, a rule is considered ‘‘major’’
where, if adopted, it results or is likely
to result in:
• An annual effect on the economy of
$100 million or more (either in the form
of an increase or a decrease);
• A major increase in costs or prices
for consumers or individual industries;
or
• Significant adverse effects on
competition, investment or innovation.
If a rule is ‘‘major,’’ its effectiveness
will generally be delayed for 60 days
pending Congressional review.
The Commission received no
comments or data on: The potential
annual effect on the economy; any
increase in costs or prices for consumers
or individual industries; and any
potential effect on competition,
investment or innovation and the
Chairman certifies that these
amendments do not constitute a ‘‘major
rule’’.
List of Subjects in 17 CFR Part 165
Whistleblowing.
For the reasons set forth in the
preamble, the Commodity Futures
Trading Commission amends 17 CFR
part 165 as follows:
PART 165—WHISTLEBLOWER RULES
1. The authority citation for part 165
is revised to read as follows:
■
Authority: 7 U.S.C. 2, 5, 9, 12a(5), 13a,
13a–1, 13b, and 26.
footnote 30.
Frm 00042
provisions as the Commission. The
Commission makes sure that a receiving
authority understands these limitations
when it shares confidential
whistleblower information with them.
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2. In § 165.2, revise paragraphs (i)(2)
and (3), (l)(1)(i), (l)(2), and (o) to read as
follows:
■
§ 165.2
Definitions.
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*
*
*
*
*
(i) * * *
(2) The whistleblower gave the
Commission original information about
conduct that was already under
examination or investigation by the
Commission, the Congress, any other
authority of the federal government, a
state Attorney General or securities
regulatory authority, any registered
entity, registered futures association, or
self-regulatory organization (as defined
in section 3(a) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a)),
foreign futures authority, or the Public
Company Accounting Oversight Board
(except in cases where the
whistleblower was an original source of
this information as defined in paragraph
(l) of this section), and the
whistleblower’s submission
significantly contributed to the success
of the action.
(3) The whistleblower reported
original information through an entity’s
internal whistleblower, legal, or
compliance procedures for reporting
allegations of possible violations of law
before or at the same time the
whistleblower reported them to the
Commission; the entity later provided
the whistleblower’s information to the
Commission, or provided results of an
audit or investigation initiated in whole
or in part in response to information the
whistleblower reported to the entity;
and the information the entity provided
to the Commission satisfies either
paragraph (i)(1) or (2) of this section.
Under this paragraph (i)(3), the
whistleblower must also submit the
same information to the Commission in
accordance with the procedures set
forth in § 165.3 within 180 days of
providing it to the entity.
*
*
*
*
*
(l) * * *
(1) * * *
(i) In order to be considered an
original source of information that the
Commission receives from Congress,
any other federal, state or local
authority, a foreign futures authority,
any registered entity, registered futures
association, or any self-regulatory
organization (as defined in section 3(a)
of the Securities Exchange Act of 1934
(15 U.S.C. 78c(a)), the whistleblower
must have voluntarily given such
authorities the information within the
meaning of this part. In determining
whether the whistleblower is the
original source of information, the
Commission may seek assistance and
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Jkt 241001
confirmation from one of the other
entities or authorities described in this
paragraph (l)(1)(i).
*
*
*
*
*
(2) Information first provided to
another authority or person. If the
whistleblower provides information to
Congress, any other federal, state, or
local authority, a foreign futures
authority, a registered entity, a
registered futures association, a selfregulatory organization (as defined in
section 3(a) of the Securities Exchange
Act of 1934 (15 U.S.C. 78c(a)), or to any
of the persons described in paragraphs
(g)(4) and (5) of this section, and the
whistleblower, within 180 days, makes
a submission to the Commission
pursuant to § 165.3, as the
whistleblower must do in order for the
whistleblower to be eligible to be
considered for an award, then, for
purposes of evaluating the
whistleblower’s claim to an award
under § 165.7, the Commission will
consider that the whistleblower
provided original information as of the
date of the whistleblower’s original
disclosure, report, or submission to one
of these other authorities or persons.
The whistleblower must establish the
whistleblower’s status as the original
source of such information, as well as
the effective date of any prior
disclosure, report, or submission, to the
Commission’s satisfaction. The
Commission may seek assistance and
confirmation from the other authority or
person in making this determination.
*
*
*
*
*
(o) Voluntary submission or
voluntarily submitted. (1) The phrase
‘‘voluntary submission’’ or ‘‘voluntarily
submitted’’ within the context of
submission of original information to
the Commission under this part, shall
mean the provision of information made
prior to any request from the
Commission, Congress, any other
federal or state authority, the
Department of Justice, a registered
entity, a registered futures association,
or a self-regulatory organization (as
defined in section 3(a) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a))
to the whistleblower or anyone
representing the whistleblower (such as
an attorney) about a matter to which the
information in the whistleblower’s
submission is relevant. If the
Commission or any of these other
authorities makes a request, inquiry, or
demand to the whistleblower or the
whistleblower’s representative first, the
whistleblower’s submission will not be
considered voluntary, and the
whistleblower will not be eligible for an
award, even if the whistleblower’s
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24497
response is not compelled by subpoena
or other applicable law. For purposes of
this paragraph (o), the whistleblower
will be considered to have received a
request, inquiry or demand if
documents or information from the
whistleblower is within the scope of a
request, inquiry, or demand that the
whistleblower’s employer receives,
unless, after receiving the documents or
information from the whistleblower, the
whistleblower’s employer fails to
provide the whistleblower’s documents
or information to the requesting
authority in a timely manner.
(2) In addition, the whistleblower’s
submission will not be considered
voluntary if the whistleblower is under
a pre-existing legal or contractual duty
to report the violations that are the
subject of the whistleblower’s original
information to the Commission,
Congress, any other federal or state
authority, the Department of Justice, a
registered entity, a registered futures
association, or a self-regulatory
organization (as defined in section 3(a)
of the Securities Exchange Act of 1934
(15 U.S.C. 78c(a)), or a duty that arises
out of a judicial or administrative order.
*
*
*
*
*
■ 3. Amend § 165.3 as follows:
■ a. Remove the introductory text; and
■ b. Revise paragraphs (a) introductory
text and (a)(1).
The revisions read as follows:
§ 165.3 Procedures for submitting original
information.
(a) A whistleblower will need to
submit the whistleblower’s information
to the Commission. A whistleblower
may submit the whistleblower’s
information:
(1) By completing and submitting a
Form TCR online and submitting it
electronically through the Commission’s
Web site at https://www.cftc.gov, or the
Commission’s Whistleblower Program
Web site at www.whistleblower.gov; or
*
*
*
*
*
■ 4. In § 165.4, revise paragraphs (a)
introductory text and (a)(1) and (2) to
read as follows:
§ 165.4
Confidentiality.
(a) In general. Section 23(h)(2) of the
Commodity Exchange Act requires that
the Commission not disclose
information that could reasonably be
expected to reveal the identity of a
whistleblower, except that the
Commission may disclose such
information in the following
circumstances, in accordance with the
Privacy Act of 1974 (5 U.S.C. 552a):
(1) When disclosure is required to a
defendant or respondent in connection
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with a public proceeding that the
Commission institutes or in another
public proceeding that is filed by an
authority to which the Commission
provides the information, as described
in paragraph (a)(2) of this section; or
(2) When the Commission determines
that it is necessary to accomplish the
purposes of the Commodity Exchange
Act and to protect customers, it may
provide whistleblower information,
without the loss of its status as
confidential whistleblower information
in the hands of the Commission, to: The
Department of Justice; an appropriate
department or agency of the Federal
Government, acting within the scope of
its jurisdiction; a registered entity,
registered futures association, or a selfregulatory organization (as defined in
section 3(a) of the Securities Exchange
Act of 1934 (15 U.S.C. 78c(a)); a State
attorney general in connection with a
criminal investigation; any appropriate
State department or agency, acting
within the scope of its jurisdiction; or a
foreign futures authority; and, as set
forth in section 23(h)(2)(C) of the
Commodity Exchange Act, each such
entity is required to maintain the
information as confidential in
accordance with the requirements of
section 23(h)(2)(A) of the Commodity
Exchange Act.
*
*
*
*
*
■ 5. Revise § 165.5 to read as follows:
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§ 165.5 Requirements for consideration of
an award.
(a) Subject to the eligibility
requirements described in this part, the
Commission will pay an award to one
or more whistleblowers who:
(1) Provide a voluntary submission to
the Commission;
(2) That contains original information;
and
(3) That leads to the successful
resolution of a covered judicial or
administrative action or successful
enforcement of a Related Action or both;
and
(b) In order to be eligible, the
whistleblower must:
(1) Have voluntarily provided the
Commission original information in the
form and manner that the Commission
requires in § 165.3;
(2) Have submitted a claim in
response to a Notice of Covered Action
or a final judgment in a Related Action
or both;
(3) Provide the Commission, upon its
staff’s request, certain additional
information, including:
(i) Explanations and other assistance,
in the manner and form that staff may
request, in order that the staff may
evaluate the use of the information
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submitted related to the whistleblower’s
application for an award;
(ii) All additional information in the
whistleblower’s possession that is
related to the subject matter of the
whistleblower’s submission related to
the whistleblower’s application for an
award; and
(iii) Testimony or other evidence
acceptable to the staff relating to the
whistleblower’s eligibility for an award;
and
(4) If requested by the Whistleblower
Office, enter into a confidentiality
agreement in a form acceptable to the
Whistleblower Office, including a
provision that a violation of the
confidentiality agreement may lead to
the whistleblower’s ineligibility to
receive an award.
(c) The Commission may, in its sole
discretion, waive any procedural
requirements based upon a showing of
extraordinary circumstances.
■ 6. In § 165.6, revise paragraph (a)(1) to
read as follows:
§ 165.6
award.
Whistleblowers ineligible for an
(a) * * *
(1) To any whistleblower who is, or
was at the time the whistleblower
acquired the original information
submitted to the Commission, a
member, officer, or employee of: the
Commission; the Board of Governors of
the Federal Reserve System; the Office
of the Comptroller of the Currency; the
Board of Directors of the Federal
Deposit Insurance Corporation; the
Director of the Office of Thrift
Supervision; the National Credit Union
Administration Board; the Securities
and Exchange Commission; the
Department of Justice; a registered
entity; a registered futures association; a
self-regulatory organization (as defined
in section 3(a) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a));
or a law enforcement organization;
*
*
*
*
*
■ 7. Amend § 165.7 as follows:
■ a. Revise the section heading;
■ b. Revise paragraphs (b), (d), and (e);
and
■ c. Add paragraphs (f) through (l).
The revisions and additions read as
follows:
§ 165.7 Procedures for award applications
in Commission actions and related actions,
and Commission award determinations.
*
*
*
*
*
(b)(1) To file a claim for a
whistleblower award, the whistleblower
must file Form WB–APP, Application
for Award for Original Information
Provided Pursuant to Section 23 of the
Commodity Exchange Act. The
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Sfmt 4700
whistleblower must sign this form as the
claimant and submit it to the
Commission by mail or fax to
Commodity Futures Trading
Commission, Three Lafayette Centre,
1155 21st Street NW., Washington, DC
20581, Fax (202) 418–5975, or by
completing and submitting the Form
WB–APP online and submitting it
electronically through the Commission’s
Web site at https://www.cftc.gov or the
Commission’s Whistleblower Program
Web site at https://
www.whistleblower.gov.
(2) The Form WB–APP, including any
attachments, must be received by the
Commission within 90 calendar days of
the date of the Notice of Covered Action
or 90 calendar days following the date
of a final judgment in a Related Action
(or if the final judgment in a Related
Action was issued prior to the action
meeting the definition of Related
Action, within 90 calendar days
following the date the action satisfied
the definition of Related Action, except
in the circumstances described in
paragraph (b)(3)(ii) of this section). One
Form WB–APP may be filed in response
to both a Notice of Covered Action and
final judgment in a Related Action if the
relevant time periods are applicable.
(3) If a covered judicial or
administrative action and Related
Action have different final judgment
dates or if there is no covered judicial
or administrative action connected to a
Related Action, a claimant, who wishes
to file a claim for an award in both a
covered judicial or administrative action
and a Related Action, or in a Related
Action that does not have a connected
covered judicial or administrative
action, must follow one of the following
procedures depending on that
claimant’s particular situation.
(i) If a final judgment imposing
monetary sanctions in a Related Action
has not been entered at the time the
claimant submits a claim for an award
in connection with a covered judicial or
administrative action, the claimant must
submit the claim for the Related Action
on Form WB–APP within ninety (90)
calendar days following the date of
issuance of a final judgment in the
Related Action.
(ii) If a final judgment in a Related
Action has been entered and a Notice of
Covered Action for a related covered
judicial or administrative action has not
been published, a claimant for an award
in both the covered judicial or
administrative action and Related
Action may submit the claims for both
the Related Action and the covered
judicial or administrative action within
ninety (90) days of the date of the Notice
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of Covered Action. The claims may be
submitted on the same Form WB–APP.
(iii) If there is a final judgment in a
Related Action that relates to a judicial
or administrative action brought by the
Commission under the Commodity
Exchange Act that is not a covered
judicial or administrative action, and
therefore there is no Notice of Covered
Action, a claimant for an award in
connection with the Related Action
must submit the claim in connection
with the Related Action on Form WB–
APP within ninety (90) calendar days
following either:
(A) The date of issuance of a final
judgment in the Related Action, if that
date is after the date of issuance of the
final judgment in the related
Commission judicial or administrative
action; or
(B) The date of issuance of the final
judgment in the related Commission
judicial or administrative action, i.e.,
the date the Related Action becomes a
Related Action, if the date of issuance
of the final judgment in the Related
Action precedes the final judgment in
the related Commission judicial or
administrative action.
*
*
*
*
*
(d) A claimant may withdraw a Form
WB–APP by submitting a written
request to the Whistleblower Office at
any time during the review process.
(e)(1) The Whistleblower Office may
issue a Proposed Final Disposition for
award applications that do not relate to
a Notice of Covered Action, a final
judgment in a Related Action, or a
previously filed Form TCR without
presentation of the award claim to the
staff designated by the Director of the
Division of Enforcement under
§ 165.15(a)(2) (‘‘Claims Review Staff’’).
In such instances, the Whistleblower
Office will inform the award claimant in
writing that the claim does not relate to
a Notice of Covered Action, a final
judgment in a Related Action, or a
previously filed Form TCR and will be
rejected unless the claimant provides
additional information. The claimant
will have 30 days from the date of the
written notice to respond and to correct
the identified deficiencies. If the
claimant does not respond in 30 days or
if the response does not include
information showing that the WB–APP
relates to a Notice of Covered Action, a
final judgment in a Related Action, or a
previously filed Form TCR the
Whistleblower Office will issue a
Proposed Final Disposition. The
claimant’s failure to submit a timely
response to the written notice from the
Whistleblower Office will constitute a
failure to exhaust administrative
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remedies, and the claimant will be
prohibited from pursuing an appeal
under § 165.13.
(2) The Whistleblower Office will
notify the Claims Review Staff of any
Proposed Final Disposition under this
paragraph (e). Within thirty (30)
calendar days thereafter, any member of
the Claims Review Staff may request
that the Proposed Final Disposition be
reviewed by the Claims Review Staff. If
no member of the Claims Review Staff
requests such a review within the 30day period, then the Proposed Final
Disposition will become the Final Order
of the Commission. In the event that a
member of the Claims Review Staff
requests a review, the Claims Review
Staff will review the record that the
Whistleblower Office relied upon in
making its determination and either
remand to the Whistleblower Office for
further action or issue a Final Order of
the Commission, which could consist of
the Proposed Final Disposition.
(f)(1) In connection with each
individual covered judicial or
administrative action or final judgment
in a Related Action, for which an award
application is submitted, once the time
for filing any appeals of the covered
judicial or administrative action or the
final judgment in the Related Action has
expired (or, where an appeal is filed of
the covered judicial or administrative
action, or the final judgment in a
Related Action, as applicable, and
concluded), the Claims Review Staff
designated under § 165.15(a)(2) will
evaluate all timely whistleblower award
claims submitted on Form WB–APP in
response to a Notice of Covered Action,
referenced in paragraph (a) of this
section, or final judgment in a Related
Action in accordance with the criteria
set forth in this part.
(2) The Whistleblower Office may
require that the claimant provide
additional information relating to the
claimant’s eligibility for an award or
satisfaction of any of the conditions for
an award, as set forth in § 165.5(b)(2).
The Whistleblower Office may also
request additional information from the
claimant in connection with the claim
for an award in a Related Action to
demonstrate that the claimant directly
(or through the Commission) voluntarily
provided the governmental agency,
regulatory authority or self-regulatory
organization the original information
that led to the Commission’s successful
covered action, and that the information
provided by the claimant led to the
successful enforcement of the Related
Action. The Whistleblower Office may
also, in its discretion, seek assistance
and confirmation from the other agency
in making this determination.
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24499
(g)(1) Following Claims Review Staff
evaluation, the Claims Review Staff will
issue a Preliminary Determination
setting forth a preliminary assessment as
to whether the claim should be granted
or denied and, if granted, setting forth
the proposed award percentage amount.
The Whistleblower Office will send a
copy of the Preliminary Determination
to the claimant.
(2) The claimant may contest the
Preliminary Determination made by the
Claims Review Staff by submitting a
written response to the Whistleblower
Office setting forth the grounds for the
claimant’s objection to either the denial
of an award or the proposed amount of
an award. The response must be in the
form and manner that the
Whistleblower Office shall require. The
claimant may also include
documentation or other evidentiary
support for the grounds advanced in the
claimant’s response. The claimant may
also request a meeting with the
Whistleblower Office within the
timeframes provided in this paragraph
(g), however such meetings are not
required, and the Whistleblower Office
may in its sole discretion deny the
request.
(i) Before determining whether to
contest a Preliminary Determination, the
claimant may, within thirty (30) days of
the date of the Preliminary
Determination, request that the
Whistleblower Office make available for
the claimant’s review the materials from
among those set forth in § 165.10 that
formed the basis of the Claims Review
Staff’s Preliminary Determination.
(ii) If the claimant decides to contest
the Preliminary Determination, the
claimant must submit the claimant’s
written response and supporting
materials setting forth the grounds for
the claimant’s objection to either the
denial of an award or the proposed
amount of an award within sixty (60)
calendar days of the date of the
Preliminary Determination, or if a
request to review materials used to
make a Preliminary Determination is
made pursuant to paragraph (g)(2)(i) of
this section, then within sixty (60)
calendar days of the Whistleblower
Office making those materials available
for the claimant’s review. The claimant
also may request a meeting with the
Whistleblower Office within those same
sixty (60) calendar days. However, such
meetings are not required and the
Whistleblower Office may in its sole
discretion decline the request.
(h) If the claimant fails to submit a
timely response pursuant to paragraph
(g) of this section, then the Preliminary
Determination will become the Final
Order of the Commission (except where
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the Preliminary Determination
recommended an award, in which case
the Preliminary Determination will be
deemed a Proposed Final Determination
for purposes of paragraph (j) of this
section). The claimant’s failure to
submit a timely response contesting a
Preliminary Determination will
constitute a failure to exhaust
administrative remedies, and the
claimant will be prohibited from
pursuing an appeal under § 165.13.
(i) If the claimant submits a timely
response under paragraph (g) of this
section, then the Claims Review Staff
will consider the issues and grounds
advanced in the claimant’s response,
along with any supporting
documentation the claimant provided,
and will make its Proposed Final
Determination.
(j) The Whistleblower Office will
notify the Commission of each Proposed
Final Determination. Within thirty (30)
calendar days thereafter, any
Commissioner may request that the
Proposed Final Determination be
reviewed by the Commission. If no
Commissioner requests such a review
within the 30-day period, then the
Proposed Final Determination will
become the Final Order of the
Commission. In the event a
Commissioner requests a review, the
Commission will review the record that
the staff relied upon in making its
determinations, including the claimant’s
submissions to the Whistleblower
Office, and issue its Final Order.
(k) A Preliminary Determination,
Proposed Final Disposition, or a
Proposed Final Determination may be
issued only after a review for legal
sufficiency by the Office of the General
Counsel.
(l) The Office of the Secretariat will
serve the claimant with the Final Order
of the Commission.
■ 8. In § 165.9, revise the introductory
text to read as follows:
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§ 165.9
award.
Criteria for determining amount of
The determination of the amount of
an award shall be in the discretion of
the Commission. This discretion shall
be exercised as prescribed by § 165.7.
*
*
*
*
*
■ 9. Amend § 165.10 as follows:
■ a. Revise the section heading;
■ b. Remove the word ‘‘and’’ at the end
of paragraph (a)(6);
■ c. Remove the period at the end of
paragraph (a)(7) and add a semicolon in
its place;
■ d. Add paragraphs (a)(8) and (9); and
■ e. Revise paragraph (b).
The revisions and additions read as
follows:
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§ 165.10 Contents of record for award
determination.
(a) * * *
(8) With respect to an award claim
involving a Related Action, any
statements or other information that an
entity provides or identifies in
connection with an award
determination, provided the entity has
authorized the Commission to share the
information with the claimant. (Neither
the Commission nor the Claims Review
Staff may rely upon information that the
entity has not authorized the
Commission to share with the
applicant); and
(9) Any other documents or materials
including sworn declarations from
third-parties that are received or
obtained by the Whistleblower Office to
assist the Commission resolve the
applicant’s award application, including
information related to the claimant’s
eligibility. (Neither the Commission nor
the Claims Review Staff may rely upon
information that a third party has not
authorized the Commission to share
with the claimant).
(b) The rules in this part do not entitle
a claimant to obtain from the
Commission any materials (including
any pre-decisional or internal
deliberative process materials that are
prepared to assist the Commission or
Claims Review Staff in deciding the
claim) other than those listed in
paragraph (a) of this section. The
Whistleblower Office may make
redactions as necessary to comply with
any statutory restrictions, to protect the
Commission’s law enforcement and
regulatory functions, and to comply
with requests for confidential treatment
from other law enforcement and
regulatory authorities.
■ 10. Revise § 165.11 to read as follows:
§ 165.11
actions.
Awards based upon related
(a) Provided that a whistleblower or
whistleblowers comply with the
requirements in §§ 165.3, 165.5 and
165.7, and pursuant to § 165.8, the
Commission may grant an award based
on the amount of monetary sanctions
collected in a ‘‘Related Action’’ or
‘‘Related Actions’’, where:
(1) A ‘‘Related Action’’ is a judicial or
administrative action that is brought by:
(i) The Department of Justice;
(ii) An appropriate department or
agency of the Federal Government,
acting within the scope of its
jurisdiction;
(iii) A registered entity, registered
futures association, or self-regulatory
organization (as defined in section 3(a)
of the Securities Exchange Act of 1934
(15 U.S.C. 78c(a));
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(iv) A State criminal or appropriate
civil agency, acting within the scope of
its jurisdiction; or
(v) A foreign futures authority; and
(2) The ‘‘Related Action’’ is based on
the original information that the
whistleblower voluntarily submitted to
the Commission and led to a successful
resolution of the Commission judicial or
administrative action.
(b) The Commission will not make an
award to a claimant for a final judgment
in a Related Action if the claimant has
already been granted an award by the
Securities and Exchange Commission
(SEC) for that same action pursuant to
its whistleblower award program under
section 21F of the Securities Exchange
Act (15 U.S.C. 78a et seq.). If the SEC
has previously denied an award to the
claimant for a judgment in a Related
Action, the whistleblower will be
precluded from relitigating any issues
before the Commission that the SEC
resolved against the claimant as part of
the award denial.
■ 11. In § 165.12, revise paragraph (c) to
read as follows:
§ 165.12 Payment of awards from the
Fund, financing of customer education
initiatives, and deposits and credits to the
Fund.
*
*
*
*
*
(c) Office of Customer Education and
Outreach. The Commission shall
undertake and maintain customer
education initiatives through its Office
of Customer Education and Outreach.
The initiatives shall be designed to help
customers protect themselves against
fraud or other violations of the
Commodity Exchange Act, or the rules
or regulations thereunder. The
Commission shall fund the initiatives
and may utilize funds deposited into the
Fund during any fiscal year in which
the beginning (October 1) balance of the
Fund is greater than $10,000,000. The
Commission shall budget, on an annual
basis, the amount used to finance
customer education initiatives, taking
into consideration the balance of the
Fund.
■ 12. Revise § 165.13 to read as follows:
§ 165.13
Appeals.
(a) Any Final Order of the
Commission relating to a whistleblower
award determination, including
whether, to whom, or in what amount
to make whistleblower awards, may be
appealed to the appropriate court of
appeals of the United States not more
than 30 days after the Final Order of the
Commission is issued, provided that
administrative remedies have been
exhausted.
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(b) The record on appeal shall consist
of:
(1) The Contents of Record for Award
Determinations, as set forth in § 165.10.
The record on appeal shall not include
any pre-decisional or internal
deliberative process materials that are
prepared to assist the Commission or
the Claims Review Staff in deciding the
claim (including staff’s draft
Preliminary Determination or any
Proposed Final Determination or staff’s
draft final determination); and
(2) The Preliminary Determination
and the Final Order of the Commission,
as set forth in § 165.7.
■ 13. Revise § 165.15 to read as follows:
§ 165.15 Administering the whistleblower
program.
sradovich on DSK3GMQ082PROD with RULES
(a) Specific authorities—(1) Payments,
deposits, and credits. The Executive
Director is authorized to deposit into or
credit collected monetary sanctions to
the Fund, and to make payment of
awards therefrom, with the concurrence
of the General Counsel and the Director
of the Division of Enforcement, or of
their respective designees.
(2) Designation of claims review staff.
The Claims Review Staff referenced in
§ 165.7 shall be composed of no fewer
than three and no more than five staff
members from any of the Commission’s
Offices or Divisions (except the Office of
General Counsel) who have not had
direct involvement in the underlying
enforcement action, as designated by the
Director of the Division of Enforcement
in consultation with the Executive
Director. The Claims Review Staff will
always include at least one staff member
who does not work in the Division of
Enforcement.
(3) Disclosure of whistleblower
identifying information. The Director of
the Division of Enforcement is
authorized on behalf of the Commission
to exercise its discretion to disclose
whistleblower identifying information
under § 165.4(a).
(b) General authority to administer
the program. The Director of the
Division of Enforcement shall have
general authority to administer the
whistleblower program except as
otherwise provided under this part.
■ 14. Revise § 165.19 to read as follows:
§ 165.19 Nonenforceability of certain
provisions waiving rights and remedies or
requiring arbitration of disputes.
(a) Non-waiver. The rights and
remedies provided for in this part may
not be waived by any agreement, policy,
form, or condition of employment,
including by a predispute arbitration
agreement. No predispute arbitration
agreement shall be valid or enforceable
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if the agreement requires arbitration of
a dispute arising under this part.
(b) Protected communications. No
person may take any action to impede
an individual from communicating
directly with the Commission’s staff
about a possible violation of the
Commodity Exchange Act, including by
enforcing, or threatening to enforce, a
confidentiality agreement or predispute
arbitration agreement with respect to
such communications.
■ 15. Add § 165.20 to read as follows:
§ 165.20 Whistleblower anti-retaliation
protections.
(a) In general. No employer may
discharge, demote, suspend, directly or
indirectly threaten or harass, or in any
other manner discriminate against, a
whistleblower in the terms and
conditions of employment because of
any lawful act done by the
whistleblower—
(1) In providing information to the
Commission in accordance with this
part; or
(2) In assisting in any investigation or
judicial or administrative action of the
Commission based upon or related to
such information.
(b) Anti-retaliation enforcement.
Section 23(h)(1)(A) of the Commodity
Exchange Act (7 U.S.C. 26(h)(1)),
including the rules in this part
promulgated thereunder, shall be
enforceable in an action or proceeding
brought by the Commission including
where retaliation is in response to a
whistleblower providing information to
the Commission after reporting the
information through internal
whistleblower, legal or compliance
procedures.
(c) Protections apply regardless of
non-qualification. The anti-retaliation
protections apply whether or not the
whistleblower satisfies the
requirements, procedures, and
conditions to qualify for an award.
■ 16. Revise appendix A to part 165 to
read as follows:
Appendix A to Part 165—Guidance
With Respect to the Protection of
Whistleblowers Against Retaliation
(a) In general. Section 23(h)(1) of
Commodity Exchange Act prohibits
employers from engaging in retaliation
against whistleblowers. A violation of
this provision could be addressed by a
Commission enforcement action, or a
lawsuit by an individual. Section
23(h)(1)(B) provides for a federal cause
of action brought by the whistleblower
against the employer, which must be
filed in the appropriate district court of
the United States within two (2) years
of the employer’s retaliatory act, and
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24501
potential relief for prevailing
whistleblowers, including
reinstatement, back pay, and
compensation for other expenses,
including reasonable attorney’s fees.
(b) Enforcement—(1) Private cause of
action. (i) An individual who alleges
discharge, demotion, suspension, direct
or indirect threats or harassment, or any
other manner of discrimination in
violation of section 23(h)(1)(A) of the
Commodity Exchange Act may bring an
action under section 23(h)(1)(B) of the
Commodity Exchange Act in the
appropriate district court of the United
States for the relief provided in section
23(h)(1)(C) of the Commodity Exchange
Act, unless the individual who is
alleging discharge or other
discrimination in violation of section
23(h)(1)(A) of the Commodity Exchange
Act is an employee of the Federal
Government, in which case the
individual shall only bring an action
under section 1221 of title 5, United
States Code.
(ii) Subpoenas. A subpoena requiring
the attendance of a witness at a trial or
hearing conducted under section
23(h)(1)(B)(ii) of the Commodity
Exchange Act may be served at any
place in the United States.
(iii) Statute of limitations. A private
cause of action under section 23(h)(1)(B)
of the Commodity Exchange Act may
not be brought more than 2 years after
the date on which the violation reported
in section 23(h)(1)(A) of the Commodity
Exchange Act is committed.
(iv) Relief. Relief for an individual
prevailing in an action brought under
section 23(h)(1)(B) of the Commodity
Exchange Act shall include—
(A) Reinstatement with the same
seniority status that the individual
would have had, but for the
discrimination;
(B) The amount of back pay otherwise
owed to the individual, with interest;
and
(C) Compensation for any special
damages sustained as a result of the
discharge or discrimination, including
litigation costs, expert witness fees, and
reasonable attorney’s fees.
(2) Commission authority to bring
action. The Commission may bring an
enforcement action against an employer
that retaliates against a whistleblower
by discharge, demotion, suspension,
direct or indirect threats or harassment,
or any other manner of discrimination.
17. Add appendix B to part 165 to
read as follows:
■
Appendix B to Part 165—Form TCR
and Form WP–APP
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UNITED STATES
COMMODITY FUTURES TRADING COMMISSION
Washington, DC 20581
FORMTCR
TIP, COMPLAINT OR REFERRAL
See attached Submission Procedures and Completion Instructions Below.
1. LastName
3. M.I.
2. First Name
4. Street Address
5. ApartmenUUnit #
6. City
7. State/Province
8. ZIP/Postal Code
9. Country
10. Telephone
11. Alt. Phone
12. E-mail Address
13. Preferred Method of
Communication
14. Occupation
1. LastName
3. M.I.
2. First Name
4. Street Address
5. ApartmenUUnit #
6. City
7. State/Province
8. ZIP/Postal Code
9. Country
10. Telephone
11. Alt. Phone
12. E-mail Address
13. Preferred Method of
Communication
Please be advised that pursuant to 5 CFR 1320.5(b)(2)(i), you are not required to respond to this collection of information
unless it displays a currently valid OMB control number.
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14. Occupation
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24503
1. Attorney's Name
2. FirmName
3. Street Address
6. ZIP/Postal Code
9. Fax
10. E-mail Address
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7. Country
30MYR1
ER30MY17.018
5. State/Province
8. Telephone
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4. City
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1. Type: D Individual D Entity
2. If an individual, specify profession. If an entity, specify type.
3. Name
4. Street Address
5. Apartment/Unit#
6. City
7. State/Province
10. Telephone
8. ZIP/Postal Code
11. E-mail Address
9. Country
12. Internet Address
13. If you are complaining about a firm or individual that has custody or control of your investments, have you had difficulty
contacting that entity or individual? [] Yes [] No [] Unknown
14. Are you, or were you, associated with the individual or firm when the alleged conduct occurred? [] Yes [] No [] Unknown
If yes, describe how you are, or were, associated with the individual or firm you are complaining about.
15. What was the initial form of contact between you and the person against whom you are filing this complaint?
[]Telephone []TV Advertisement []Radio Advertisement []Internet Advertisement []E-Mail
[]U.S. Postal Service [] Event (seminar, free lunch, ext.) [] Other
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If other, please describe:
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1. Type: D Individual D Entity
24505
2. If an individual, specify profession. If an entity, specify type.
3. Name
5. Apartment/Unit#
4. Street Address
6. City
7. State/Province
10. Telephone
8. ZW/Postal Code
11. E-mail Address
9. Country
12. Internet Address
13. If you are complaining about a finn or individual that has custody or control of your investments, have you had difficulty
contacting that entity or individual? [] Yes [] No [] Unknown
14. Are you, or were you, associated with the individual or finn when the alleged conduct occurred? [] Yes [] No [] Unknown
If yes, describe how you are, or were, associated with the individual or finn you are complaining about.
15. What was the initial form of contact between you and the person against whom you are filing this complaint?
[]Telephone []TV Advertisement []Radio Advertisement []Internet Advertisement []E-Mail
[]U.S. Postal Service []Event (seminar, free lunch, ext.) [] Other
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If other, please describe:
24506
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1. Occurrence Date (mm/dd//yyyy):
2. Is the conduct on-going?
[] Yes [] No [] Don'tKnow
3. Please select the option(s) that best describes your complaint.
[] Fraudulent representations that persuaded you to trade futures, options, swaps, forex, retail commodity, or leveraged transactions
[] Some type of cheating or fraud that occurred after you had deposited funds to trade futures, options, swaps, forex, retail
commodity, or leveraged transactions (for example, if someone used the funds you deposited to pay off someone else or you have
asked for the return of your funds and have been refused).
[] Someone or some firm that should be registered under the Commodity Exchange Act, but is not.
[] Disruptive or manipulative trading activity in the futures, options or swaps markets.
[] The trading of futures options, or swaps based upon confidential information by someone not allowed to use such information.
[] If your complaint does not fit into any of the above-described categories please describe below.
4. Select the type of product/instrument:
[] A futures contract, including a single stock futures contract, a narrow based or broad based security future contract.
[] An option on a futures contract, an option on a commodity, BUT NOT an option on a security or a basket of securities.
[] A swap, including a mixed swap BUT NOT a swap based on a single security or based on a narrow (i.e., nine or less) index of
securities.
[] A cash (or physical) contract traded in interstate commerce.
[] A foreign currency transaction.
If a foreign currency transaction:
Are you an individual that trades or invests more than $5,000,000 and enters into the foreign currency agreement
to manage the risk associated with some other asset or liability?
[] Yes [] No
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Are you an individual that trades or invests more than $10,000,000 on a discretionary basis?
[] Yes [] No
o
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o
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24507
[]A commodity transaction entered into or offered on a leveraged or margined basis, or fmanced by the offeror, the counterparty, or
someone acting in concert with the offeror or counterparty.
If yes:
0
Are you an individual that trades or invests more than $10,000,000 on a discretionary basis?
[] Yes [] No
0
Are you an individual that trades or invests more than $5,000,000 and enters into the foreign currency agreement
to manage the risk associated with some other asset or liability?
[] Yes [] No
[]Other
If other, please describe:
5. If applicable, what is the name of product/investment?
6. Have you suffered a monetary loss? []Yes []No
If yes, describe how much.
7. Has the individual or firm who engaged in the conduct acknowledged their fault?[] Yes []No
8. Have you or anyone else taken any action against the firm or person who engaged in the alleged conduct? [] Yes []No
If yes, select the appropriate category:
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[] Prior complaint to the CFTC.
[] Complaint to another regulator.
[]A state or federal criminal law enforcement entity.
[] A legal action filed against the person or firm in a court oflaw.
[]Additional comments based on above selection (e.g., Who, When, Contact, To whom made, Case Number, Court).
24508
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9. State in detail all facts pertinent to the alleged violation. Explain why you believe the facts described constitute a violation of
the Commodity Exchange Act. If necessary, please use additional sheets.
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10. Describe all supporting materials in your possession and the availability and location of any additional supporting materials not
in your possession. If necessary, please use additional sheets.
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24509
1. Describe how and from whom you obtained the information that supports your allegations. If any information was obtained
from an attorney or in a communication where an attorney was present, identify such information with as much particularity as
possible. In addition, if any information was obtained from a public source, identify the source with as much particularity as
possible. Use additional sheets, if necessary.
2. Identify with particularity any documents or other information in your submission that you believe could reasonably be expected
to reveal your identity and explain the basis for your belief that your identity would be revealed if the documents or information
were disclosed to a third party.
3. Have you or your attorney had any prior communication(s) with the CFTC concerning this matter? [] Yes [] No
If"Yes," please identify the CFTC staffmember(s) with whom you or your attorney communicated:
4. Have you or your attorney provided the information to any other agency or organization, or has any other agency or organization
requested the information or related information from you? [] Yes [] No
If"Yes," please provide details. Use additional sheets, if necessary.
If "Yes," please provide the name and contact information of the point of contact at the other agency or organization, if known.
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5. Does this complaint relate to an entity of which you are or were an officer, director, counsel, employee, consultant or contractor?
[] Yes [] No
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If "Yes," have you reported this violation to your supervisor, compliance office, whistleblower hotline, ombudsman, or any other
available mechanism at the entity for reporting violations? [] Yes [] No
If "Yes," please provide details including the date you took the action(s ). Use additional sheets, if necessary.
6. Have you taken any other action regarding your complaint? [] Yes [] No
If"Yes," please provide details. Use additional sheets, if necessary.
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7. Provide any additional information that you think may be relevant.
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24511
1. Are you currently, or were you at the time that you acquired the original information that you are submitting to the CFTC, a
member, officer or employee of: the CFTC; the Board of Governors ofthe Federal Reserve System; the Office ofthe
Comptroller of the Currency; the Board of Directors of the Federal Deposit Insurance Corporation; the Director of the Office of
Thrift Supervision; the National Credit Union Administration Board; the Securities and Exchange Commission; the Department
of Justice; a registered entity; a registered futures association; a self-regulatory organization (as defmed in 3(a) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a)); a law enforcement organization; or a foreign regulatory authority or law enforcement
organization?
No
2. Are you providing this information pursuant to a cooperation agreement with the CFTC or another agency or organization?
[] Yes [] No
3. Before you provided this information, did you (or anyone representing you) receive any request, inquiry or demand that
relates to the subject matter of this submission (i) from the CFTC, (ii) in connection with an investigation, inspection or
examination by any registered entity, registered futures association or self-regulatory organization (as defmed in 3(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)); or (iii) in connection with an investigation by the Congress, or any other
federal or state authority?
No
4. Are you currently a subject or target of a criminal investigation, or have you been convicted of a criminal violation, in
connection with the information that you are submitting to the CFTC?
[] Yes [] No
5. Did you acquire the information being provided to the CFTC from any person described in Questions 1 through 4 above?
[] Yes [] No
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6. Ifyou answered "Yes" to any of Questions 1 through 5 above, please provide details. Use additional sheets, if necessary.
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The solicitation of this information is authorized under the Commodity Exchange Act, 7 U.S. C. 1 et seq. This form may be used by
anyone wishing to provide the CFTC with information concerning a violation of the Commodity Exchange Act or the CFTC's
regulations. This form and related information will be processed in the United States of America, the location of the CFTC. If an
individual is submitting this information for the CFTC's whistleblower award program pursuant to Section 23 of the Commodity
Exchange Act, the information provided will be used to enable the CFTC to determine the individual's eligibility for payment of an
award. This information will be used to investigate and prosecute violations of the Commodity Exchange Act and the CFTC's
regulations. The CFTC may disclose this information when required to be disclosed to a defendant or respondent in connection with
a public proceeding instituted by the Commission. In addition, if the Commission determines such disclosure is necessary or
appropriate to accomplish the purposes of the CEA and to protect customers, the Commission may provide such information to the
Department of Justice; an appropriate department or agency of the Federal Government; a state attorney general; any appropriate
department or agency of a state; a registered entity, registered futures association, or self-regulatory organization (as defmed in
Section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)); or a foreign futures authority. Those entities are subject to
the same confidentiality requirements as the Commission. The Commission also may disclose such information in accordance with
Privacy Act of 1974 System of Records Notices CFTC-49, "Whistleblower Records" (exempted), CFTC-10, "Investigatory
Records" (exempted), and CFTC-16, "Enforcement Case Files," (available on the CFTC Privacy Program web page,
www.cftc.gov/Transparency/PrivacyOffice) exercised in accordance with the confidentiality provisions in the CEA and 17 CFR
165.4. Furnishing information on or through this form is voluntary. However, if an individual is providing information for the
whistleblower award program, not providing required information may result in the individual not being eligible for award
consideration. Also, you may choose to submit this form anonymously, but in order to receive a whistleblower award, you would
need to be identified to select CFTC staff for a fmal eligibility determination, and in unusual circumstances, you may need to be
identified publicly for trial. [See instructions for further information.] By signing this Declaration, I am agreeing to the collection,
processing, use, and disclosure of my personally identifiable information as stated herein.
I declare under penalty of perjury under the laws of the United States that the information contained herein is true, correct and
complete to the best of my knowledge, information and belief. I fully understand that I may be subject to prosecution and ineligible
for a whistleblower award if, in my submission of information, my other dealings with the Commodity Futures Trading
Commission, or my dealings with another authority in connection with a related action, I knowingly and willfully make any false,
fictitious or fraudulent statements or representations, or use any false writing or document knowing that the writing or document
contains any false, fictitious or fraudulent statement or entry.
Print Name
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Date
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Signature
Submission Procedures
Questions concerning this form may
be directed to Commodity Futures
Trading Commission, Whistleblower
Office, Three Lafayette Centre, 1155 21st
Street NW., Washington, DC 20581.
• If you are submitting information
for the CFTC’s whistleblower award
program, you must submit your
information using this Form TCR.
• You may submit this form
electronically, through the Web portal
found on the CFTC’s Web site at https://
www.whistleblower.gov. You may also
print this form and submit it by mail to
Commodity Futures Trading
Commission, Whistleblower Office,
Three Lafayette Centre, 1155 21st Street,
NW., Washington, DC 20581, or by
facsimile to (202) 418–5975.
• You have the right to submit
information anonymously. If you do not
submit anonymously, please note that
the CFTC is required by law to maintain
the confidentiality of any information
which could reasonably identify you,
and will only reveal such information in
limited and specifically-defined
circumstances. See 7 U.S.C. 26(h)(2); 17
CFR 165.4. However, in order to receive
a whistleblower award, you will need to
be identified to select CFTC staff for a
final eligibility determination, and in
unusual circumstances, you may need
to be identified publicly for trial. You
should therefore provide some means
for the CFTC’s staff to contact you, such
as a telephone number or an email
address.
Instructions for Completing Form TCR
General
All references to ‘‘you’’ and ‘‘your’’
are intended to mean the complainant.
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Section A: Tell Us About Yourself
Questions 1–14: Please provide the
following information about yourself:
b last name, first name and middle
initial;
b complete address, including city,
state and zip code;
b telephone number and, if available,
an alternate number where you can
be reached;
b your email address (to facilitate
communications, we strongly
encourage you to provide an email
address, especially if you are filing
anonymously);
b your preferred method of
communication; and
b your occupation.
Section B: Your Attorney’s Information
Complete this section only if you are
represented by an attorney in this
matter.
Questions 1–10: Provide the following
information about your attorney:
b attorney’s name;
b firm name;
b complete address, including city,
state and zip code;
b telephone number and fax number;
and
b email address.
Section C: Tell Us Who You Are
Complaining About
Question 1–2: Choose one of the
following that best describes the
individual’s profession or the type of
entity to which your complaint relates:
For Individuals: accountant, analyst,
associated person, attorney, auditor,
broker, commodity trading advisor,
commodity pool operator, compliance
officer, employee, executing broker,
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24513
executive officer or director, financial
planner, floor broker, floor trader,
trader, unknown or other (specify).
For Entities: bank, commodity pool,
commodity pool operator, commodity
trading advisor, futures commission
merchant, hedge fund, introducing
broker, major swap participant, retail
foreign exchange dealer, swap dealer,
unknown or other (specify).
Questions 3–12: For each individual
and/or entity, provide the following
information, if known:
b full name;
b complete address, including city,
state and zip code;
b telephone number;
b email address; and
b internet address, if applicable.
Questions 13: If the firm or individual
you are complaining about has custody
or control of your investment, identify
whether you have had difficulty
contacting that firm or individual.
Question 14: Identify if you are, or
were, associated with the individual or
firm you are complaining about. If yes,
describe how you are, or were,
associated with the individual or firm
you are complaining about.
Question 15: Identify the initial form
of contact between you and the person
against whom you are filing this
complaint.
Section D: Tell Us About Your
Complaint
Question 1: State the date (mm/dd/
yyyy) that the alleged conduct occurred
or began.
Question 2: Identify if the conduct is
on-going.
Question 3: Choose the option that
you believe best describes the nature of
your complaint. If you are alleging more
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than one violation, please list all that
you believe may apply.
Question 4: Select the type of product
or instrument you are complaining
about.
Question 5: If applicable, please name
the product or instrument. If yes, please
describe.
Question 6: Identify whether you have
suffered a monetary loss. If yes, please
describe.
Question 7: Identify if the individual
or firm you are complaining about
acknowledged their fault.
Question 8: Indicate whether you
have taken any other action regarding
your complaint, including whether you
complained to the CFTC, another
regulator, a law enforcement agency, or
any other agency or organization, or
initiated legal action, mediation,
arbitration or any other action.
If you answered yes, provide details,
including the date on which you took
the action(s) described, the name of the
person or entity to whom you directed
any report or complaint, and contact
information for the person or entity, if
known, and the complete case name,
case number and forum of any legal
action you have taken.
Question 9: State in detail all facts
pertinent to the alleged violation.
Explain why you believe the facts
described constitute a violation of the
Commodity Exchange Act.
Question 10: Describe all supporting
materials in your possession and the
availability and location of any
additional supporting materials not in
your possession.
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Section E: Whistleblower Program
Question 1: Describe how you
obtained the information that supports
your allegations. If any information was
obtained from an attorney or in a
communication where an attorney was
present, identify such information with
as much particularity as possible. In
addition, if any information was
obtained from a public source, identify
the source with as much particularity as
possible.
Question 2: Identify any documents or
other information in your submission on
this Form TCR that you believe could
reasonably be expected to reveal your
identity. Explain the basis for your
belief that your identity would be
revealed if the documents or
information were disclosed to a third
party.
Question 3: State whether you or your
attorney have had any prior
communication(s) with the CFTC
concerning this matter.
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If you answered ‘‘yes’’, identify the
CFTC staff member(s) with whom you
or your attorney communicated.
Question 4: Indicate whether you or
your attorney have provided the
information you are providing to the
CFTC to any other agency or
organization, or whether any other
agency or organization has requested the
information or related information from
you.
If you answered ‘‘yes’’, provide details
and the name and contact information
of the point of contact at the other
agency or organization, if known.
Question 5: Indicate whether your
complaint relates to an entity of which
you are, or were in the past, an officer,
director, counsel, employee, consultant
or contractor.
If you answered ‘‘yes’’, state whether
you have reported this violation to your
supervisor, compliance office,
whistleblower hotline, ombudsman, or
any other available mechanism at the
entity for reporting violations. Please
provide details, including the date on
which you took the action.
Question 6: Indicate whether you
have taken any other action regarding
your complaint, including whether you
complained to the CFTC, another
regulator, a law enforcement agency, or
any other agency or organization, or
initiated legal action, mediation,
arbitration or any other action.
If you answered ‘‘yes’’, provide
details, including the date on which you
took the action(s) described, the name of
the person or entity to whom you
directed any report or complaint, and
contact information for the person or
entity, if known, and the complete case
name, case number and forum of any
legal action you have taken.
Question 7: Provide any additional
information you think may be relevant.
Section F: Whistleblower Eligibility
Requirements and Other Information
Question 1: State whether you are
currently, or were at the time that you
acquired the original information that
you are submitting to the CFTC, a
member, officer or employee of: The
CFTC; the Board of Governors of the
Federal Reserve System; the Office of
the Comptroller of the Currency; the
Board of Directors of the Federal
Deposit Insurance Corporation; the
Director of the Office of Thrift
Supervision; the National Credit Union
Administration Board; the Securities
and Exchange Commission; the
Department of Justice; a registered
entity; a registered futures association; a
self-regulatory organization (as defined
in 3(a) of the Securities Exchange Act of
1934 (15 U.S.C. 78c(a)); a law
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enforcement organization; or a foreign
regulatory authority or law enforcement
organization.
Question 2: State whether you are
providing the information pursuant to a
cooperation agreement with the CFTC or
with another agency or organization.
Question 3: State whether you are
providing this information before you
(or anyone representing you) received
any request, inquiry or demand that
relates to the subject matter of this
submission (i) from the CFTC, (ii) in
connection with an investigation,
inspection or examination by any
registered entity, registered futures
association or self-regulatory
organization (as defined in 3(a) of the
Securities Exchange Act of 1934 (15
U.S.C. 78c(a)), or (iii) in connection
with an investigation by the Congress,
or any other federal or state authority.
Question 4: State whether you are
currently a subject or target of a criminal
investigation, or whether you have been
convicted of a criminal violation, in
connection with the information you are
submitting to the CFTC.
Question 5: State whether you
acquired the information you are
providing to the CFTC from any
individual described in Questions 1
through 4 of this section.
Question 6: If you answered yes to
any of Questions 1 through 5, please
provide details.
Section G: Privacy Notice and
Whistleblower’s Declaration
You must sign this Declaration if you
are submitting this information
pursuant to the CFTC whistleblower
program and wish to be considered for
an award. If you are submitting your
information using the electronic version
of Form TCR through the CFTC’s web
portal, you must check the box to agree
with the declaration. If you are
submitting your information
anonymously, you must still sign this
Declaration (using the term
‘‘anonymous’’) or check the box as
appropriate, and, if you are represented
by an attorney, you must provide your
attorney with the original of this signed
form, or maintain a copy for your own
records.
Section H: Counsel Certification
If you are submitting this information
pursuant to the CFTC whistleblower
program and you are doing so
anonymously through an attorney, your
attorney must sign the Counsel
Certification Section. If your attorney is
submitting your information using the
electronic version of Form TCR through
the CFTC’s web portal, he/she must
check the box to agree with the
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certification. If you are represented in
this matter but you are not submitting
your information pursuant to the CFTC
whistleblower program, your attorney
24515
does not need to sign this Certification
or check the box.
UNITED STATES
COMMODITY FUTURES TRADING COMMISSION
Washington, DC 20581
FORMWB-APP
APPLICATION FOR AWARD FOR ORIGINAL INFORMATION PROVIDED
PURSUANT TO SECTION 23 OF THE COMMODITY EXCHANGE ACT
1. LastName
M.I.
First Name
2. Street Address
SSN Last Four Digits
Apartment/Unit #
City
State/Province
ZIP/Postal Code
3. Telephone
Alt. Phone
E-mail Address
City
State/Province
Zip/Postal Code
4. Telephone
Fax
Country
E-mail Address
1. Attorney's Name
2. FirmName
Country
Please be advised that pursuant to 5 CFR 1320.5(b)(2)(i), you are not required to respond to this collection of information
unless it displays a currently valid OMB control number.
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3. Street Address
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la. How did you submit original information to the CFTC?
Website
D
Mail
D
Fax
D
Other
lb. Date that you submitted the information (mrn!dd/yyyy)
D
2a. Did you file a CFTC Form TCR? YES
D
NO
D
2b. Form TCR Number
2c. Date that you filed your Form TCR (mm/ddlyyyy)
3. Name(s) of the individual(s) and/or entity(s) to which your tip or complaint relates
1. Date of relevant Notice of Covered Action (mrn!ddlyyyy)
2. Notice Number
3a. Case Name
3b. Case Number
1. Name of other agency or organization to which you provided your information
2. Name and contact information for point of contact at the agency or organization, if known
4b. Case Number
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3b. Date of action by the agency or organization (mrn!dd/yyyy)
4a. Case N arne
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3a. Date that you provided the information (mrn!dd/yyyy)
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24517
1. Are you currently, or were you at the time that you acquired the original information that you submitted to the CFTC, a member,
officer or employee of: the CFTC; the Board of Governors of the Federal Reserve System; the Office of the Comptroller of the
Currency; the Board of Directors of the Federal Deposit Insurance Corporation; the Director of the Office of Thrift Supervision; the
National Credit Union Administration Board; the Securities and Exchange Commission; the Department of Justice; a registered
entity; a registered futures association; a self-regulatory organization; a law enforcement organization; or a foreign regulatory
authority or law enforcement organization?
YES D NOD
2. Did you provide the information identified in Section C above pursuant to a cooperation agreement with the CFTC or another
agency or organization?
YES D NOD
3. Before you provided the information identified in Section C above, did you (or anyone representing you) receive any request,
inquiry or demand that relates to the subject matter of your submission (i) from the CFTC, (ii) in connection with an investigation,
inspection or examination by any registered entity, registered futures association or self-regulatory organization, or (iii) in
connection with an investigation by the Congress, or any other federal or state authority?
YES D NOD
4. Are you currently a subject or target of a criminal investigation, or have you been convicted of a criminal violation, in
connection with the information identified in Section C above and upon which your application for an award is based?
YES D NOD
5. Did you acquire the information that you provided to the CFTC from any person described in Questions 1 through 4 above?
YES D NOD
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6. If you answered "Yes" to any of Questions 1 through 5 above, please provide details. Use additional sheets, if necessary.
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Explain the basis for your belief that you are entitled to an award in connection with your submission of information to the CFTC,
or to another agency or organization in a related action. Provide any additional information that you think may be relevant in light
of the criteria for determining the amount of an award set forth in Section 23 of the Commodity Exchange Act and Part 165 of the
CFTC's regulations. Include any supporting documents in your possession or control, and use additional sheets, if necessary.
Privacy Act Statement
This notice is given under the Privacy
Act of 1974. The Privacy Act requires
that the Commodity Futures Trading
Commission (CFTC) inform individuals
of the following when asking for
information. The solicitation of this
information is authorized under the
Commodity Exchange Act, 7 U.S.C. 1 et
seq. The information provided will
enable the CFTC to determine the
whistleblower award claimant’s
eligibility for payment of an award
pursuant to Section 23 of the
Commodity Exchange Act and Part 165
of the CFTC’s regulations. This
information will be used to investigate
and prosecute violations of the
Commodity Exchange Act and the
CFTC’s regulations. This information
may be disclosed to federal, state, local
or foreign agencies or other authorities
responsible for investigating,
prosecuting, enforcing or implementing
laws, rules or regulations implicated by
the information consistent with the
confidentiality requirements set forth in
Section 23 of the Commodity Exchange
Act and Part 165 of the CFTC’s
regulations. The information will be
maintained and additional disclosures
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may be made in accordance with
System of Records Notices CFTC–49,
‘‘Whistleblower Records’’ (exempted),
CFTC–10, ‘‘Investigatory Records’’
(exempted), and CFTC–16,
‘‘Enforcement Case Files.’’ The CFTC
requests the last four digits of the
claimant’s Social Security Number for
use as an individual identifier to
administer and manage the
whistleblower award program.
Executive Order 9397 (November 22,
1943) allows federal agencies to use the
Social Security Number as an individual
identifier. Furnishing the information is
voluntary. However, if an individual is
providing information for the
whistleblower award program, not
providing required information may
result in the individual not being
eligible for award consideration.
Questions concerning this form may
be directed to Commodity Futures
Trading Commission, Whistleblower
Office, Three Lafayette Centre, 1155 21st
Street NW., Washington, DC 20581.
Submission Procedures
• This form must be used by persons
making a claim for a whistleblower
award in connection with information
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24519
provided to the CFTC, or to another
agency or organization in a related
action. In order to be deemed eligible for
an award, you must meet all the
requirements set forth in Section 23 of
the Commodity Exchange Act and Part
165 of the CFTC’s regulations.
• You must sign the Form WB–APP
as the claimant. If you wish to submit
the Form WB–APP anonymously, you
must do so through an attorney, your
attorney must sign the Counsel
Certification Section of the Form WB–
APP that is submitted to the CFTC, and
you must give your attorney your
original signed Form WB–APP so that it
can be produced to the CFTC upon
request.
• During the whistleblower award
claim process, your identity must be
verified in a form and manner that is
acceptable to the CFTC prior to the
payment of any award.
Æ If you are filing your claim in
connection with information that you
provided to the CFTC, then your Form
WB–APP, and any attachments thereto,
must be received by the CFTC within
ninety (90) days of the date of the Notice
of Covered Action, or the date of a final
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judgment in a related action to which
the claim relates.
Æ If you are filing your claim in
connection with information that you
provided to another agency or
organization in a related action, then
your Form WB–APP, and any
attachments thereto, must be received
by the CFTC as follows:
• If a final order imposing monetary
sanctions has been entered in a related
action at the time that you submit your
claim for an award in connection with
a CFTC action, you may submit your
claim for an award in that related action
on the same Form WB–APP that you use
for the CFTC action.
• If a final order imposing monetary
sanctions in a related action has not
been entered at the time that you submit
your claim for an award in connection
with a CFTC action, you must submit
your claim on Form WB–APP within
ninety (90) days of the issuance of a
final order imposing sanctions in the
related action.
• If a final order imposing monetary
sanctions in a related action relates to a
judicial or administrative action brought
by the Commission under the
Commodity Exchange Act that is not a
covered judicial or administrative
action, and therefore there would not be
a Notice of Covered Action, you must
submit your claim on Form WB–APP for
an award in connection with the related
action within ninety (90) calendar days
following either (1) the date of issuance
of a final order in the related action, if
that date is after the date of issuance of
the final judgment in the related
Commission judicial or administrative
action; or (2) the date of issuance of the
final judgment in the related
Commission judicial or administrative
action, i.e., the date the related action
becomes a related action, if the date of
issuance of the final order in the related
action precedes the final judgment in
the related Commission judicial or
administrative action.
• To submit your Form WB–APP, you
may print it and either submit it by mail
to Commodity Futures Trading
Commission, Whistleblower Office,
Three Lafayette Centre, 1155 21st Street
NW., Washington, DC 20581, or by
facsimile to (202) 418–5975. You also
may submit this form electronically,
through the web portal found on the
CFTC’s Web site at https://www.cftc.gov,
which is also accessible from the CFTC
Whistleblower Program Web site at
www.whistleblower.gov.
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17:28 May 26, 2017
Jkt 241001
Instructions for Completing Form WB–
APP
General
All references to ‘‘you’’ and ‘‘your’’
are intended to mean the whistleblower
award claimant.
Section A: Tell Us About Yourself
Questions 1–3: Please provide the
following information about yourself:
• last name, first name, middle initial
and the last four digits of your
Social Security Number;
• complete address, including city,
state and zip code;
• telephone number and, if available,
an alternate number where you can
be reached; and
• your email address (to facilitate
communications, we strongly
encourage you to provide an email
address, especially if you are
making your claim anonymously).
Section B: Your Attorney’s Information
Complete this section only if you are
represented by an attorney in this
matter. Questions 1–4: Provide the
following information about your
attorney:
• attorney’s name;
• firm name;
• complete address, including city,
state and zip code;
• telephone number and fax number;
and
• email address.
Section C: Tell Us About Your Tip or
Complaint
Question 1a: Indicate the manner in
which you submitted your original
information to the CFTC.
Question 1b: Provide the date on
which you submitted your original
information to the CFTC.
Question 2a: State whether you filed
a CFTC Form TCR.
Question 2b: If you filed a CFTC Form
TCR, provide the Form’s number.
Question 2c: If you filed a CFTC Form
TCR, provide the date on which you
filed the Form.
Question 3: Provide the name(s) of the
individual(s) and/or entity(s) to which
your tip or complaint relates.
Section D: Notice of Covered Action
The process for making a claim for a
whistleblower award for a CFTC action
begins with the publication of a ‘‘Notice
of Covered Action’’ on the CFTC’s Web
site. This Notice is published whenever
a judicial or administrative action
brought by the CFTC results in the
imposition of monetary sanctions
exceeding $1,000,000. The Notice is
published on the CFTC’s Web site
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Sfmt 4700
subsequent to the entry of a final
judgment or order in the action that by
itself, or collectively with other
judgments or orders previously entered
in the action, exceeds the $1,000,000
threshold required for a whistleblower
to be potentially eligible for an award.
The CFTC will not contact
whistleblower claimants directly as to
Notices of Covered Actions; prospective
claimants should monitor the CFTC
Web site for such Notices.
Question 1: Provide the date of the
Notice of Covered Action to which this
claim relates.
Question 2: Provide the notice
number of the Notice of Covered Action.
Question 3a: Provide the case name
referenced in the Notice of Covered
Action.
Question 3b: Provide the case number
referenced in the Notice of Covered
Action.
Section E: Claims Pertaining to Related
Actions
Question 1: Provide the name of the
agency or organization to which you
provided your information.
Question 2: Provide the name and
contact information for your point of
contact at the agency or organization, if
known.
Question 3a: Provide the date on
which you provided your information to
the agency or organization referenced in
Question 1 of this section.
Question 3b: Provide the date on
which the agency or organization
referenced in Question 1 of this section
filed the related action that was based
upon the information that you provided.
Question 4a: Provide the case name of
the related action.
Question 4b: Provide the case number
of the related action.
Section F: Eligibility Requirements and
Other Information
Question 1: State whether you are
currently, or were at the time that you
acquired the original information that
you submitted to the CFTC, a member,
officer or employee of: The CFTC; the
Board of Governors of the Federal
Reserve System; the Office of the
Comptroller of the Currency; the Board
of Directors of the Federal Deposit
Insurance Corporation; the Director of
the Office of Thrift Supervision; the
National Credit Union Administration
Board; the Securities and Exchange
Commission; the Department of Justice;
a registered entity; a registered futures
association; a self-regulatory
organization; a law enforcement
organization; or a foreign regulatory
authority or law enforcement
organization.
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sradovich on DSK3GMQ082PROD with RULES
Question 2: State whether you
provided the information that you
submitted to the CFTC pursuant to a
cooperation agreement with the CFTC,
or with any other agency or
organization.
Question 3: State whether you
provided this information before you (or
anyone representing you) received any
request, inquiry or demand that relates
to the subject matter of your submission
(i) from the CFTC, (ii) in connection
with an investigation, inspection or
examination by any registered entity,
registered futures association or selfregulatory organization, or (iii) in
connection with an investigation by the
Congress, or any other federal or state
authority.
Question 4: State whether you are
currently a subject or target of a criminal
investigation, or whether you have been
convicted of a criminal violation, in
connection with the information that
you submitted to the CFTC and upon
which your application for an award is
based.
Question 5: State whether you
acquired the information that you
provided to the CFTC from any
individual described in Questions 1
through 4 of this section.
Question 6: If you answered yes to
any of Questions 1 through 5 of this
section, please provide details.
Section G: Entitlement to Award
This section is optional. Use this
section to explain the basis for your
belief that you are entitled to an award
in connection with your submission of
information to the CFTC, or to another
agency in connection with a related
action. Specifically, address why you
believe that you voluntarily provided
the CFTC with original information that
led to the successful enforcement of a
judicial or administrative action filed by
the CFTC, or a related action. Refer to
§ 165.9 of the CFTC’s regulations for
further information concerning the
relevant award criteria.
Section 23(c)(1)(B) of the Commodity
Exchange Act and § 165.9(a) of the
CFTC’s regulations require the CFTC to
consider the following factors in
determining the amount of an award: (1)
The significance of the information
provided by a whistleblower to the
success of the CFTC action or related
action; (2) the degree of assistance
provided by the whistleblower and any
legal representative of the whistleblower
in the CFTC action or related action; (3)
the programmatic interest of the CFTC
in deterring violations of the
Commodity Exchange Act (including
regulations under the Act) by making
awards to whistleblowers who provide
VerDate Sep<11>2014
17:28 May 26, 2017
Jkt 241001
information that leads to the successful
enforcement of such laws; (4) whether
the award otherwise enhances the
CFTC’s ability to enforce the
Commodity Exchange Act, protect
customers, and encourage the
submission of high quality information
from whistleblowers; and (5) potential
adverse incentives from oversize
awards. Address these factors in your
response as well.
Section H: Claimant’s Declaration
You must sign this Declaration if you
are submitting this claim pursuant to
the CFTC whistleblower program and
wish to be considered for an award. If
you are submitting your claim
anonymously, you must do so through
an attorney, and you must provide your
attorney with your original signed Form
WB–APP.
Section I: Counsel Certification
If you are submitting this claim
pursuant to the CFTC whistleblower
program anonymously, you must do so
through an attorney, and your attorney
must sign the Counsel Certification
Section.
Issued in Washington, DC, on May 22,
2017, by the Commission.
Christopher J. Kirkpatrick,
Secretary of the Commission.
Note: The following appendix will not
appear in the Code of Federal Regulations.
Appendix to Whistleblower Awards
Process—Commission Voting Summary
On this matter, Acting Chairman Giancarlo
and Commissioner Bowen voted in the
affirmative. No Commissioner voted in the
negative.
[FR Doc. 2017–10801 Filed 5–26–17; 8:45 am]
BILLING CODE 6351–01–P
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
24 CFR Parts 28, 30, 87, 180, and 3282
[Docket No. FR–5942–F–02]
RIN 2501–AD79
Inflation Catch-Up Adjustment of Civil
Monetary Penalty Amounts Final Rule
and Adjustment of Civil Monetary
Penalty Amounts for 2017
AGENCY:
Office of the General Counsel,
HUD.
ACTION:
Final rule.
This rule makes final the
interim final rule, published on June 15,
2016, to amend HUD’s civil monetary
penalty (CMP) regulations. The interim
SUMMARY:
PO 00000
Frm 00067
Fmt 4700
Sfmt 4700
24521
final rule applied a new methodology to
calculate civil money penalties as
mandated by the Federal Civil Penalties
Inflation Adjustment Act Improvements
Act of 2015, starting with a ‘‘catch up’’
adjustment to correct previous
inaccuracies; removed three obsolete
civil monetary penalty provisions; and
made a technical change to the existing
codified regulation implementing the
Program Fraud Civil Remedies Act. The
changes from the interim final rule
made final by this final rule continue to
be effective as of August 16, 2016.
In addition, this rule provides for
2017 inflation adjustments of civil
monetary penalty amounts required by
the Federal Civil Penalties Inflation
Adjustment Act Improvements Act of
2015, and makes three technical
amendments and a conforming statutory
change.
DATES: Effective date: June 29, 2017.
Applicability date: The applicability
date for catch-up adjustment was
August 16, 2016.
FOR FURTHER INFORMATION CONTACT:
Dane Narode, Associate General
Counsel, Office of Program
Enforcement, Department of Housing
and Urban Development, 1250
Maryland Avenue SW., Suite 200,
Washington, DC 20024; telephone
number 202–245–4141 (this is not a tollfree number). Hearing- or speechimpaired individuals may access this
number via TTY by calling the Federal
Information Relay Service, toll-free, at
800–877–8339.
SUPPLEMENTARY INFORMATION:
I. Background
A. The June 15, 2016, Interim Rule
The Federal Civil Penalties Inflation
Adjustment Act Improvements Act of
2015 (2015 Act) (Pub. L. 114–74)
amended the Federal Civil Penalties
Inflation Adjustment Act of 1990 (28
U.S.C. 2461 note) requiring all Federal
agencies to issue an interim final rule
implementing changes to their civil
money penalties. On June 15, 2016,
pursuant to the requirements of the
2015 Act, HUD published an interim
final rule for public comment, entitled
‘‘Inflation Catch-Up Adjustment of Civil
Monetary Penalty Amounts’’ (81 FR
38931). The 2015 Act required agencies
to make an initial catch-up adjustment
by interim final rule, using a new
methodology designed to correct
inaccuracies in the previous method of
computing inflation adjustments. In
order to address these inaccuracies, the
2015 Act excluded adjustments made
under the law prior to its amendment,
and it provided that the initial catch-up
adjustment was the percentage by which
E:\FR\FM\30MYR1.SGM
30MYR1
Agencies
[Federal Register Volume 82, Number 102 (Tuesday, May 30, 2017)]
[Rules and Regulations]
[Pages 24487-24521]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-10801]
-----------------------------------------------------------------------
COMMODITY FUTURES TRADING COMMISSION
17 CFR Part 165
RIN 3038-AE50
Whistleblower Awards Process
AGENCY: Commodity Futures Trading Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Commodity Futures Trading Commission (``Commission'') is
amending its regulations and forms to enhance the process for reviewing
whistleblower claims and to make related changes to clarify staff
authority to administer the whistleblower program. The Commission also
is making appropriate rule amendments to implement its reinterpretation
of the Commission's anti-retaliation authority.
DATES: This final rule is effective July 31, 2017.
FOR FURTHER INFORMATION CONTACT: Anthony Hays, Counsel, (202) 418-5584,
ahays@cftc.gov, Commodity Futures Trading Commission, Three Lafayette
Centre, 1155 21st Street NW., Washington, DC 20581.
SUPPLEMENTARY INFORMATION: The Commission is amending its rules in
Sec. Sec. 165.1 through 165.19 and appendix A, and adopting new rule
Sec. 165.20 and appendix B as well as amending Forms TCR (``Tip,
Complaint or Referral'') and WB-APP (``Application for Award for
Original Information Provided Pursuant to Section 23 of the Commodity
Exchange Act'').
I. Background
In 2011, the Commission adopted its part 165 regulations, which
implement Section 23 of the Commodity Exchange Act (``CEA''), 7 U.S.C.
26, by establishing a regulatory framework for the whistleblower
program.\1\ Part 165 provides for the payment of awards, subject to
certain limitations and conditions, to whistleblowers who voluntarily
provide the Commission with original information about a violation of
the CEA that leads to the successful enforcement of an action brought
by the Commission that results in monetary sanctions exceeding
$1,000,000 (``Covered Action''), or the successful enforcement of a
Related Action, as that term is defined in the rules.
---------------------------------------------------------------------------
\1\ See Whistleblower Incentives and Protection, 76 FR 53172
(Aug. 25, 2011).
---------------------------------------------------------------------------
The award amount must be between 10 and 30 percent of the amount of
monetary sanctions collected in a Covered Action or a Related Action
and is paid from the CFTC Customer Protection Fund. The Commission has
discretion regarding the amount of an award based on the significance
of the information, the degree of assistance provided by the
whistleblower, and other criteria.
Since the whistleblower program was established in 2011, the need
for certain improvements has become apparent. In order to address that
need the Commission proposed amendments to the part 165 rules
(``Proposal'').\2\ As explained further below, these rules provide for
targeted revisions to the claims review process and to the authority of
staff to administer the
[[Page 24488]]
whistleblower program. The Commission also proposed to amend the rules
to implement its anti-retaliation authority under Section 23(h)(1)
based on a reinterpretation of that authority. Finally, the Commission
proposed to amend its rules to permit whistleblowers to receive awards
based on both Covered Actions and the successful enforcement of Related
Actions, as defined in the rules.
---------------------------------------------------------------------------
\2\ Whistleblower Awards Process, 81 FR 59551 (Aug. 30, 2016).
---------------------------------------------------------------------------
The Commission received seven comment letters in response to the
Proposal. Most of the comment letters focused on specific aspects of
the proposed rule amendments and made targeted recommendations and
suggestions. Three of the comment letters were from private
individuals, two were from law firms with whistleblower practices, and
two were from whistleblower advocacy groups.\3\ Most of the comments
received were generally supportive of the Commission's whistleblower
program and proposed changes to the rules. One comment letter was
critical of the current process for handling whistleblower award claims
but did not provide specific comments on the proposed rules.\4\ One of
the whistleblower advocacy groups incorporated by reference the comment
letter previously submitted by the other group.\5\
---------------------------------------------------------------------------
\3\ See, respectively, the following: Letter dated September 12,
2016, from Joseph N. Perlman; Letter dated September 16, 2016, from
Chris Barnard; Letter dated September 27, 2016, from Matthew Erpen;
Letter dated September 29, 2016, from Robert D.M. Garson, Garson,
Segal, Steinmetz, Fladgate LLP (GS2Law); Letter dated September 29,
2016, from Eric L. Young, Esq., and James J. McEldrew, Esq.,
McEldrew Young (MY); Letter dated September 28, 2016, from Jacklyn
N. DeMar, Acting Director of Legal Education, Taxpayers Against
Fraud (TAF); and Letter dated September 29, 2016, from Stephen M.
Kohn, Executive Director, and David K. Colapinto, General Counsel,
National Whistleblower Center (NWC).
\4\ See Joseph N. Perlman comment letter.
\5\ See NWC comment letter.
---------------------------------------------------------------------------
II. Description of Final Rules
The Commission is adopting the amendments to its part 165
whistleblower rules as set forth in the Proposed Rules with certain
changes made in response to public comments. The amendments and the
public comments relevant to each amendment are discussed below.\6\
---------------------------------------------------------------------------
\6\ The public comments on the Proposed Rule are available at
https://comments.cftc.gov/PublicComments/CommentList.aspx?id=1733.
---------------------------------------------------------------------------
Eligibility Requirements for Consideration of an Award
a. Proposed Rule
The Commission proposed targeted changes to the rules relating to
consideration of an award. The Commission proposed to revise Rule 165.5
to make clear that a claimant may receive an award in a Covered Action,
in a Related Action, or both. Also in Rule 165.5, the Commission
proposed to make clear that a claimant may be eligible for an award by
providing the Commission original information without being the
original source of the information, and the Commission provided the
public with notice that the Commission has discretion to waive its
procedural rules based upon a showing of extraordinary circumstances.
In addition, the Commission proposed to revise the definition of
``original source'' in Rule 165.2(l) to extend the timeframe from 120
to 180 days that a whistleblower has to file a Form TCR pursuant to
Rule 165.3 after previously providing the same information to Congress,
any other federal or state authority, a registered entity, a registered
futures association, a self-regulatory organization, or to any of the
persons described in Rule 165.2(g)(4) and (5).
b. Comments Received
The Commission received several comments regarding the proposed
changes to the requirements for consideration of an award.
Proposed Rule 165.5(b) removed being the original source of
information received by the Commission from the eligibility criteria
for an award. The Commission received one comment which endorsed this
approach.\7\
---------------------------------------------------------------------------
\7\ See TAF comment letter.
---------------------------------------------------------------------------
The Commission received two comments regarding the Commission's
proposal to amend Rule 165.5(c) to allow the Commission to waive
procedural requirements in extraordinary circumstances. Both commenters
supported the proposed change to this rule.\8\ One commenter noted that
the proposed change to this rule is consistent with the overall policy
goals of the whistleblower program and that whistleblowers have varying
levels of sophistication and familiarity with the procedural
requirements.\9\ Another commenter noted that rigid application of the
procedural requirements would undermine the spirit of Congress when it
created the whistleblower program and that the proposed change would
further encourage whistleblowers to provide information even when they
may not have followed all of the technical rules to be eligible for an
award.\10\
---------------------------------------------------------------------------
\8\ See TAF and MY comment letters.
\9\ See TAF comment letter.
\10\ See MY comment letter.
---------------------------------------------------------------------------
Proposed Rule 165.2(l) extended the deadline from 120 to 180 days
that a whistleblower has to make a submission to the Commission and
retain status as the original source of information after first
submitting the information to Congress, any other federal or state
authority, a registered entity, a registered futures association, a
self-regulatory organization, or to any of the persons described in
paragraphs (g)(4) and (5) of Rule 165.2 to be eligible for an award.
The Commission received two comments supporting this proposed
change.\11\ One commenter stated that many whistleblowers are often at
or beyond the 120-day period before considering external reporting
because they wait for the outcome of the internal investigation before
reporting externally and internal investigations often take some time.
This commenter also stated that while 180 days is a substantial
improvement, an even longer time frame would help ensure that well-
intentioned individuals receive full credit for their information.\12\
---------------------------------------------------------------------------
\11\ See TAF and MY comment letters.
\12\ See MY comment letter.
---------------------------------------------------------------------------
The other commenter agreed that the period of eligibility should be
lengthened to 180 days but urged the Commission to state that the 180-
day period refers only to the whistleblower's ``look back'' eligibility
to retain original source status and that whistleblowers will not lose
that status or eligibility for an award if they perfect their
submission to the Commission after 180 days elapse. This commenter also
urged the Commission to revise Rule 165.2(l)(2) to include individuals
who first provide information to foreign governments or self-regulatory
authorities because of the global nature of the commodities markets and
the increasing number of international whistleblowers participating in
the Dodd-Frank whistleblower programs. This commenter went on to state
that there is no persuasive policy reason for excluding such persons
from original source status because some of the Commission's recent
enforcement cases were brought with the cooperation of foreign
authorities and the proposed rules allow for whistleblower awards based
on Related Actions by certain foreign authorities. Hence, this
commenter argued that if whistleblowers may receive awards based on
Related Actions undertaken by foreign authorities, those whistleblowers
should be entitled to original source eligibility in instances where
they report to a foreign authority prior to reporting to the
Commission.\13\
---------------------------------------------------------------------------
\13\ See TAF comment letter.
---------------------------------------------------------------------------
[[Page 24489]]
c. Final Rule
The Commission received no comments regarding the proposed revision
in Rule 165.5(a)(3) that makes clear that a claimant may receive an
award in a Covered Action, in a Related Action, or both and,
accordingly, is adopting the amendment as proposed.
With respect to the proposed revision to Rule 165.5(b), the
Commission believes that removing the requirement that the
whistleblower be the original source of information received by the
Commission is consistent with Section 23(b)(1), and will prevent the
potential situation where a claimant reports internally before
providing information to the Commission and the employer self-reports
the violation of the CEA, thereby foreclosing the claimant's
eligibility for an award because the employer is the ``original
source'' of the information. The Commission is adopting this amendment
as proposed.
The Commission has also decided to adopt as proposed Rule 165.5(c),
which clarifies that the Commission may waive any procedural
requirements upon a showing of extraordinary circumstances.
After consideration of the comments on Rule 165.2(l), the
Commission has decided to adopt the rule with one change, a conforming
change and a minor correction. The Commission is adding foreign futures
authorities \14\ to the authorities and entities to which a claimant
may provide information prior to filing a Form TCR and retain original
source status. This change is consistent with the list of agencies and
authorities in Section 23(h)(2)(C) with which the Commission can share
information received from a whistleblower if necessary or appropriate
to accomplish the purposes of the Commodity Exchange Act and protect
customers. The Commission understands that individuals who are located
outside the United States might decide to approach a local authority
prior to providing information to the Commission. As a result, and in
consideration of the global nature of the futures and swaps markets and
the number of the Commission's recent enforcement actions that have
been undertaken with the cooperation of foreign governments, the
Commission believes it is appropriate to expand the list of entities in
Rules 165.2(l)(1)(i) and 165.2(l)(2). In addition, the Commission is
adding registered entity and registered futures association to, and
removing futures association from the list of authorities in Rule
165.2(i)(2); and adding registered entity and registered futures
association to Rule 165.2(l)(1)(i) in order to conform those rules to
existing language in Rules 165.4(a)(2) and 165.11 and to Section
23(h)(2)(C)(i). The Commission is correcting a typographical error in
Rule 165.2(l)(2) by removing ``of any'' and correcting an omission by
inserting ``local'' in the list of authorities in the first sentence.
---------------------------------------------------------------------------
\14\ Section 1a(26) of the CEA defines foreign futures authority
as any foreign government, or any department, agency, governmental
body, or regulatory organization empowered by a foreign government
to administer or enforce a law, rule, or regulation as it relates to
a futures or options matter, or any department or agency of a
political subdivision of a foreign government empowered to
administer or enforce a law, rule, or regulation as it relates to a
futures or options matter.
---------------------------------------------------------------------------
The Commission also clarifies that the 180-day timeframe in Rule
165.2(l)(2) relates only to the date on which the Commission will
consider a whistleblower's original information to have been received.
Filing a Form TCR more than 180 days after reporting information to
another authority does not strip a whistleblower of original source
status or render a whistleblower ineligible for an award. Also, the
Commission is amending Rule 165.2(i)(3) to extend the time from 120 to
180 days in order to conform that rule to the extension of the
timeframe in Rule 165.2(1)(2).
Award Claims Review Under Rule 165.7
a. Proposed Rules
The Commission proposed several changes to the award claims review
process under Rule 165.7 to better define and specify each step in the
process. Those steps were spelled out in proposed new paragraphs (f)
through (l), along with new provisions regarding withdrawing award
applications in proposed paragraph (d) and disposition of claims that
do not relate to Notices of Covered Actions (``NCAs'') or final
judgments in Related Actions in proposed new paragraph (e). The
proposed amendments would establish a review process similar to that
established under the SEC's whistleblower rules.\15\ Specifically, the
Commission proposed to discontinue the Whistleblower Award
Determination Panel and replace it with a review process handled by a
Claims Review Staff designated by the Director of the Division of
Enforcement in consultation with the Executive Director, with the
Claims Review Staff being assisted by the Whistleblower Office staff
within the Division of Enforcement. The proposed rules also would
provide an additional means for the submission of the required Form WB-
APP, Application for Award for Original Information Provided Pursuant
to Section 23 of the Commodity Exchange Act, in Rule 165.7(b)(1);
explain the deadline for filing Form WB-APP under different timing
scenarios for final judgments in covered judicial or administrative
actions and Related Actions in proposed Rule 165.7(b)(3); and make a
conforming change by renumbering prior paragraph (e) in Rule 165.7 as
paragraph (l).
---------------------------------------------------------------------------
\15\ See 17 CFR 240.21F-10(d)-(h) (2014).
---------------------------------------------------------------------------
Proposed Rule 165.7(d) would permit a claimant to withdraw an award
application at any point in the review process by submitting a written
request to the Whistleblower Office.
Proposed Rule 165.7(e) addressed the Commission's experience of
receiving a number of Form WB-APPs that appear to be unrelated to NCAs
or final judgments in Related Actions as well as Form WB-APPs that do
not relate to a previously filed Form TCR. In order to reduce the
administrative burden on the Commission, the Commission proposed that
such facially ineligible claims primarily be handled by the
Whistleblower Office. The Whistleblower Office would notify the
claimant of the deficiencies in the Form WB-APP and provide an
opportunity for the claimant to correct the deficiencies or withdraw
the claim before the finalization of the denial of the claim. If the
claimant does not correct the deficiencies or withdraw the claim, the
Whistleblower Office would notify the Claims Review Staff of the
proposed denial, which would be called a Proposed Final Disposition,
and any member of the Claims Review Staff would have the opportunity to
request review of the proposed denial. If no member of the Claims
Review Staff requests review, the Proposed Final Disposition would
become the final order of the Commission. If a member of the Claims
Review Staff requests review, the Claims Review Staff would review the
record for the denial and either remand to the Whistleblower Office for
further action or issue a final order of the Commission, which consists
of the proposed denial.
In Rule 165.7(f), the Commission proposed that the Claims Review
Staff would evaluate all timely award applications submitted on a Form
WB-APP in response to the NCA or a final judgment in a Related Action.
During the review process, the Whistleblower Office may require that
claimants provide additional information, explanation, or assistance as
set forth in Rule 165.5(b)(3). For award claims on Related Actions, as
proposed in Rule 165.7(f), the Whistleblower Office may request
additional information from the claimant to demonstrate that the
[[Page 24490]]
claimant voluntarily provided the governmental agency, regulatory
authority, or self-regulatory organization the same original
information that led to the Commission's successful enforcement action
and the successful enforcement of the Related Action. The Whistleblower
Office may also seek assistance and confirmation from the other agency
in making this determination.
In Rule 165.7(g)(1), the Commission proposed that following the
initial evaluation by the Claims Review Staff, the Claims Review Staff
would issue a Preliminary Determination setting forth a preliminary
assessment as to whether the claim should be granted or denied and, if
granted, setting forth the proposed award percentage amount. The
Whistleblower Office would send a copy of the Preliminary Determination
to the claimant. The proposed amendments would allow a claimant the
opportunity to contest the Preliminary Determination.
In Rule 165.7(g)(2), the Commission proposed that the claimant
could take any of the following steps in response to a Preliminary
Determination:
Within thirty (30) calendar days of the date of the
Preliminary Determination, the claimant may request that the
Whistleblower Office make available for the claimant's review the
materials that formed the basis of the Claim Review Staff's Preliminary
Determination.
Within sixty (60) calendar days of the date of the
Preliminary Determination, or if a request to review materials is made,
then within sixty (60) days of the Whistleblower Office making those
materials available for the claimant's review, a claimant may submit a
written response setting forth the grounds for the claimant's objection
to either the denial of an award or the proposed amount of an award.
The claimant may also include documentation or other evidentiary
support for the grounds advanced in any response, and request a meeting
with the Whistleblower Office. However, such meetings would not be
required. The Whistleblower Office may in its sole discretion decline
the request.
Proposed Rule 165.7(h) provides that if a claimant fails to submit
a timely response under new Rule 165.7(g), then a Preliminary
Determination denying an award becomes the Final Order of the
Commission and constitutes a failure to exhaust the claimant's
administrative remedies. Failure to exhaust administrative remedies
would prohibit the claimant from pursuing judicial review.
If the claimant fails to contest a Preliminary Determination
recommending an award, the Preliminary Determination would be treated
as a Proposed Final Determination, which would make it subject to
Commission review under proposed Rule 165.7(j).
Proposed Rule 165.7(i) describes the procedure in cases where a
claimant submits a timely response under proposed Rule 165.7(g). In
such cases, the Claims Review Staff would consider the issues raised in
the claimant's response, along with any supporting documentation that
the claimant provided, and prepare a Proposed Final Determination.
In Rule 165.7(j), the Commission proposed that when there is a
Proposed Final Determination, the Whistleblower Office would notify the
Commission of the Proposed Final Determination. Within thirty (30) days
of that notification, any Commissioner may request Commission review of
the Proposed Final Determination. If no Commissioner makes such a
request, the Proposed Final Determination would become the Commission's
Final Order. If a Commissioner does request review, the Commission
would review the record that the Claims Review Staff relied upon in
reaching its determination. On the basis of its review of that record,
the Commission would issue its Final Order, which the Office of the
Secretariat would then serve on the claimant. In reaching their
decisions, the Commission and Claims Review Staff would only consider
information in the record.
The Office of General Counsel would review both preliminary and
proposed final determinations prior to issuance, and no such
determination may be issued without the Office of General Counsel's
determination of legal sufficiency.
In Rule 165.15(a)(2), the Commission proposed that the Enforcement
Director, in consultation with the Executive Director, would designate
a minimum of three and a maximum of five staff from the Division of
Enforcement or other Commission Offices or Divisions to serve on the
Claims Review Staff, either on a case-by-case basis or for fixed
periods. At least one person from outside the Division of Enforcement
would be included on the Claims Review Staff at all times. The Claims
Review Staff would be composed only of persons who have not had direct
involvement with the underlying enforcement action. Due to the Office
of General Counsel's role in the review process, the Commission
believes it is appropriate to exclude staff from that Office from
serving as Claims Review Staff.
b. Comments Received
The Commission received two generally supportive comments regarding
the proposed additions and changes to the award review process.\16\ One
commenter stated that having dedicated staff for award determinations
would be beneficial and urged the Commission to publish NCAs for
Related Actions that the Commission knows emanated from the information
provided by the whistleblower.\17\ The other commenter reasoned that
the proposed changes in the process allow whistleblowers to better
understand the reasons for a particular award or denial and to make
informed requests for reconsideration, and that the proposed changes
offer greater transparency in the awards process and will likely
obviate the need for some appeals.\18\
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\16\ See GS2Law and TAF comment letters.
\17\ See GS2Law comment letter.
\18\ See TAF comment letter.
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c. Final Rule
After consideration of the comments received, the Commission has
decided to adopt Rule 165.7 as proposed. The Commission anticipates
that these revisions will provide the public and claimants with greater
transparency in the awards claim review process and enhance the
expeditious and fair administration of the program. The Commission
declines a commenter's request that the Commission publish NCAs for
Related Actions. The Commission believes that doing so would be
unworkable and burdensome for the Commission. Publishing NCAs on all
criminal and civil actions that may become Related Actions would
require staff to track, monitor, and report on many actions that are
not Commission actions. Rule 165.7(b)(3) clearly describes how and when
actions brought by other agencies become Related Actions and when a
claimant must file a Form WB-APP with the Commission to apply for an
award in connection with these actions. It is the claimant's
responsibility to track the outcome of a Related Action if the claimant
has an interest in pursuing an award application based on that Related
Action.
In response to the comment on the nature of the Claims Review
staff, the Commission notes that the Claims Review Staff will be drawn
from the Commission's Divisions and Offices, other than the Office of
General Counsel. As detailed in Rule 165.7, the role of Claims Review
Staff is primarily
[[Page 24491]]
to make preliminary decisions on the merits of award applications
including, if applicable, award amounts.\19\ Service by a Commission
employee on the Claims Review Staff will be in addition to the other
duties of the employee in their Division or Office. As is the case at
the SEC, the Claims Review Staff will be assisted by staff from the
Whistleblower Office who will assemble the factual record related to an
award claim, provide analysis of an award claimant's eligibility and,
if applicable, make a recommendation of a proposed award amount.
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\19\ The Commission will have an opportunity to review
preliminary denial decisions that are contested by the claimant and
all award recommendations. See Rule 165.7(j).
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Awards for Related Actions
a. Proposed Rules
For award claims on Related Actions, the Commission proposed to
amend Rule 165.11 to permit claimants who are eligible to receive an
award in a covered judicial or administrative action to also receive an
award based on the monetary sanctions that are collected from a final
judgment in a Related Action. The exception would be that the
Commission would not make an award to a claimant for a Related Action
if the claimant has been granted an award by the SEC for the same
action under the SEC's whistleblower program. This would prevent a
claimant from ``double dipping'' and receiving more than one award for
the same action. Similarly, if the SEC has previously denied an award
to a claimant in a Related Action, the claimant would be precluded from
relitigating any issues before the Commission that the SEC resolved
against the claimant as part of the SEC's award denial. The limitations
on obtaining an award for both Covered Actions and final judgments in
Related Actions are similar to those imposed by the SEC in its
whistleblower program.
A Related Action under Rule 165.2(m) is based on the original
information voluntarily submitted by a whistleblower to the Commission
that led to the successful enforcement of a Commission action, and
therefore, an action may only become a Related Action after there is a
successful Commission action. The Commission accordingly proposed
revisions to clarify timing requirements for filing whistleblower award
claims regarding Related Actions. The proposed revisions were intended
to clarify that, except in the circumstances described in proposed Rule
165.7(b)(3)(ii), award claims for a Related Action shall be filed
within 90 days after an action meets the definition of Related Action
if the order in the Related Action was issued prior to the successful
enforcement of a Commission action. The proposed revisions also clarify
that award claims for a Related Action and in response to a Notice of
Covered Action may be submitted on the same Form WB-APP in certain
circumstances.
b. Comments Received
The Commission received one comment regarding Proposed Rule 165.11.
The commenter expressed some confusion as to whether the information
provided by a whistleblower must be presented to the Commission prior
to presenting the information to another authority in order for a
whistleblower to be eligible for an award in a Related Action.\20\ The
commenter stated that the Commission should clarify that whistleblowers
who first take their information to another authority and later provide
their information to the Commission are eligible for an award.
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\20\ See TAF comment letter.
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c. Final Rule
The Commission has decided to adopt Rule 165.11 as proposed. The
Commission also takes this opportunity to clarify that a whistleblower
retains eligibility under Rule 165.11, Rule 165.5, and Rule 165.2(l)
for an award based on information provided by the whistleblower to
another authority prior to the time that the whistleblower provided the
information to the Commission.
Contents of Record for Award Determinations
a. Proposed Rules
The Commission proposed to amend Rule 165.10(a) to identify
additional items that may be included in the contents of record for
award claims as a result of the Commission's proposal to amend Rule
165.11 to permit claimants who are eligible to receive an award in a
covered judicial or administrative action to also receive an award
based on the monetary sanctions that are collected from a final
judgment in a Related Action. For Related Actions, any documents or
materials, including sworn declarations from third parties, that are
received or obtained by the Whistleblower Office to assist the
Commission in resolving the claimant's award application, including
information relating to the claimant's eligibility, may be included in
the record. In addition, any information provided to the Commission by
the entity bringing the Related Action that has been authorized by the
entity for sharing with the claimant may be part of the record. Neither
of these types of information may be relied upon by the Commission or
the Claims Review Staff in making a decision on a whistleblower award
claim or included in the contents of the record if the entity did not
authorize the Commission to share the information with the claimant.
The Commission also proposed revisions to Rules 165.10(b) and
165.13(b) to clarify that the record on appeal shall not include any
pre-decisional or internal deliberative process materials that are
prepared to assist the Commission or Claims Review Staff in deciding a
claim.
b. Comments Received
The Commission received one comment regarding the record for award
determinations and appeals. This commenter strongly urged the
Commission to further revise Proposed Rules 165.10 and 165.13 to not
categorically exclude from the record pre-decisional and internal
deliberative process materials prepared to assist the Commission in
award determinations, and suggested that the Commission would be
denying whistleblowers a meaningful right to appeal by defining by rule
what constitutes the record.\21\
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\21\ See TAF comment letter.
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c. Final Rule
Following consideration of the comments received, the Commission
has decided to adopt the revisions to Rules 165.10(a) and (b) and
165.13(b) as proposed. The Commission disagrees with the comment that
the Commission defining by rule what constitutes the record denies a
claimant a meaningful right to appeal award determinations.\22\ Under
Rules 165.10 and 165.13, all factual materials relied on by Claims
Review Staff or the Commission in making an award determination will be
available to the claimant and reviewing court. The Commission believes
that pre-decisional or internal deliberative process materials that are
prepared to assist the Commission or Claims Review Staff from the
record are protected by attorney-client privilege as well as attorney
work product under well
[[Page 24492]]
settled law. Similarly, the exclusion of any documents or materials
provided by a third-party that have not been authorized for release by
the third-party does not deny the claimant due process because these
materials will not be considered by the Commission or Claims Review
Staff in reaching a decision on the award claim.
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\22\ As an example, the commenter referred to appeals of IRS
whistleblower cases (Insinga v. Commissioner, Tax Court Docket No.
9011-13W (July 27, 2016) and Whistleblower One 10683-13W et al. v.
Commissioner, 145 T.C. No. 8 (September 16, 2015)) in which the
whistleblower sought factual information in the underlying
enforcement cases to determine whether the information the
whistleblower provided the IRS contributed to the success of the
enforcement action. The Commission believes its practice is
distinguishable in that all of the facts that underlie the
Commission's decision are included in the record under Rules 165.10
and 165.13.
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Authority To Administer the Program
a. Proposed Rule
The Commission proposed to directly assign responsibilities for
administering the program by rule rather than by delegation in Rule
165.15 in light of the proposed changes to the claims review process.
Since 2013, the Whistleblower Office has been located within the
Division of Enforcement. The Commission believes that it is appropriate
to assign overall responsibility for administering the whistleblower
program to the Director of the Division of Enforcement. The Commission
notes that this approach is consistent with the SEC's practice.
The Commission also proposed to directly assign responsibility to
Claims Review Staff for the issuance of Preliminary Determinations and
Proposed Final Determinations, and issuance of Proposed Final
Dispositions to the WBO. In this connection, the Commission proposed,
again consistent with the SEC's practice, that no member of the Claims
Review Staff can have had any direct involvement in the underlying
enforcement case.
b. Comments Received
The Commission received no comments regarding the proposed changes
to the authority to administer the whistleblower program.
c. Final Rule
The Commission has decided to adopt the revisions to the authority
to administer the program as proposed.
Whistleblower Identifying Information
a. Proposed Rule
Rule 165.4 implements the confidentiality protections for
whistleblower identifying information contained in Section 23(h)(2). In
proposed Rule 165.15(a)(3), the Commission proposed to authorize the
Director of the Division of Enforcement to act on its behalf to
disclose whistleblower identifying information as permitted by Section
23(h)(2)(C) and Rule 165.4(a)(2) and (3). The Commission stated in the
Proposal that it expects the Director of Enforcement to exercise this
discretion to release such sensitive information in a manner consistent
with, and when deemed necessary or appropriate to accomplish, the
customer protection and law enforcement goals of the whistleblower
program. The Commission said in the Proposal that it believes that this
delegation of authority will increase investor protection by
facilitating administration of the whistleblower program as well as
investigations and actions by those agencies and authorities that are
eligible to receive whistleblower identifying information under Section
23(h)(2)(C) and Rule 165.4. Any agency or authority that receives
whistleblower identifying information is bound by the same
confidentiality requirements as those applicable to the Commission
under Section 23(h)(2)(A) and such sharing of information does not
change the confidential nature of the information. Certain information
provided to other agencies or authorities is also protected from
disclosure under Section 8 of the CEA. The Commission also proposed to
revise a question in the Form TCR, question E.8, seeking consent from
whistleblowers to share their information with other authorities.
b. Comments Received
The Commission received one comment opposing the proposed changes
to Rule 165.4 and Form TCR. The commenter viewed the proposed changes
as a ``loosening'' of the confidentiality of a whistleblower's
identity. In addition, the commenter suggested that: (1) A
whistleblower should be entitled to know the other agencies with which
identifying information is shared; (2) the scope of the proposal on
sharing the whistleblower's identifying information is too broad; and,
(3) the Commission does not have the ability to monitor or enforce
confidential treatment of the whistleblower's identifying information
once it has been shared with other agencies. The commenter also
suggested that the whistleblower should be consulted by the Commission
prior to any sharing of the whistleblower's identifying information
with other agencies and provided the opportunity to prevent such
sharing because the whistleblower may have reported to the Commission
rather than to another authority as the result of previous encounters
with personnel at other agencies that left the whistleblower with less
trust or confidence in those agencies. Finally, the commenter argued
that the sharing of information with self-regulatory organizations is
too broad because the term ``self-regulatory organization'' is not
properly defined in the rules.\23\
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\23\ See GS2Law comment letter.
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c. Final Rule
After consideration of the comment received, the Commission is
adopting Rule 165.4(a)(2) as proposed, with a minor change. Section
23(h)(2)(C) provides the Commission with the authority to share all
information provided by the whistleblower with the authorities listed
in that section without the consent or consultation of the
whistleblower, subject to the limitation that providing the
whistleblower's identifying information is necessary or appropriate to
accomplish the purposes of the CEA and protect customers. Reassigning
the authority to make the decision to disclose whistleblower
identifying information in a manner permitted by Section 23(h)(2)(C)
from the Director of the Whistleblower Office to a more senior
Commission official, the Director of the Division of Enforcement, is
not a loosening of whistleblower identity protections. The Commission
believes that this delegation of authority will increase investor
protection by facilitating administration of the whistleblower program
as well as investigations and actions by those agencies and authorities
that are eligible to receive whistleblower identifying information
under Section 23(h)(2)(C) and Rule 165.4. Section 23(h)(2)(C)(i), Rule
165.4(a)(2), and the Privacy Act Notice on Form TCR identify for
whistleblowers the entities with which whistleblower identifying
information may be shared. If a potential whistleblower is not
comfortable with the possibility that confidential information about
them may be shared with one or more of these entities, the potential
whistleblower can decide not to file a Form TCR.
The Commission does not believe that Commission monitoring of the
treatment of confidential whistleblower information by a receiving
authority is necessary. As the commenter pointed out, receiving
authorities are bound by the same confidentiality provisions as the
Commission. The Commission makes sure that a receiving authority
understands these limitations when it shares confidential whistleblower
information with them. Further, all of the entities with which the
Commission may share confidential information are experienced in
handling and protecting confidential information such as whistleblower
identifying information.
The Commission does not agree with the commenter's assertion that
``self-
[[Page 24493]]
regulatory organization'' is not defined. Section 23(h)(2)(C)(i)(III)
limits the self-regulatory organizations with which confidential
whistleblower information can be shared to those self-regulatory
organizations that fit within the definition in section 3(a) of the
Securities Exchange Act of 1934.\24\ This is the meaning of ``self-
regulatory organization'' throughout Section 23 of the CEA and the part
165 Rules. To eliminate any confusion in this regard, the Commission is
making conforming amendments throughout the Part 165 Rules to clarify
that a self-regulatory organization is a self-regulatory organization
as defined by section 3(a) of the Securities Exchange Act of 1934.
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\24\ 15 U.S.C. 78c(a).
---------------------------------------------------------------------------
Finally, in light of the comments, the Commission also has
determined to remove Question E.8 on Form TCR. The wording of this
question was not consistent with the authority granted to the
Commission to share whistleblower identifying information in Section
23(h)(C)(i) and the language of Rule 165.4(a)(2). The Privacy Act
Notice in Form TCR puts potential whistleblowers on notice that the
information that they provide to the Commission may be shared with
other authorities.
Retaliation Against Whistleblowers
a. Proposed Rule
In the Proposal, the Commission proposed several substantial
changes to its anti-retaliation authority. The Commission proposed
revisions to Rule 165.19 and appendix A, and the addition of new Rule
165.20. The Commission proposed to amend Rule 165.19 to prohibit a
person from taking any action to impede an individual from
communicating directly with the Commission's staff about a possible
violation of the CEA, including by enforcing, or threatening to
enforce, a confidentiality agreement or predispute arbitration
agreement with respect to such communications. The Commission also
proposed to revise its 2011 interpretation that it lacked statutory
authority to bring an enforcement action against an employer that
retaliated against a whistleblower. The Commission proposed that
Sections 6(c), 6(d), 6b, 6c, and 23(i) of the CEA allow the Commission
to pursue such violations of the Act through an enforcement action. The
Commission proposed Rule 165.20 to make clear that Section 23(h)(1)(A)
of the CEA, including the rules in part 165 promulgated thereunder, is
enforceable in an action or proceeding brought by the Commission.
Proposed Rule 165.20(c) provides that the anti-retaliation protections
apply irrespective of whether a whistleblower qualifies for an award.
The Commission also proposed changes to appendix A to reflect the
Commission's ability to bring enforcement actions to prosecute
violations of the anti-retaliation prohibition of Section 23(h)(1)(A).
b. Comments Received
The Commission received several comments regarding the proposed
revisions to the anti-retaliation provisions. The Commission received
one comment letter that addressed the proposed revisions to Rules
165.19(b), 165.20(b) and 165.20(c) \25\ and another comment letter
focused on proposed Rule 165.20(c).\26\
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\25\ See MY comment letter.
\26\ See MY and TAF comment letters.
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The comment on Rule 165.19(b) supported the proposal and noted that
this change will more closely align the Commission with the SEC with
respect to combating the chilling of whistleblowing by employers who
require waivers of rewards in severance packages for whistleblowing.
This commenter was similarly supportive of the proposed expansion
of Commission enforcement authority to address retaliation against
whistleblowers. This commenter noted that more substantial penalties or
a government enforcement action would be more apt to deter retaliation
against whistleblowers than only a private right of action.
Both commenters asked the Commission to clarify its position on
proposed Rule 165.20(c) with regard to taking enforcement action
against employers that retaliate against whistleblowers prior to the
whistleblower filing a Form TCR with the Commission. One commenter
reiterated the point that many whistleblowers await the outcome of any
internal investigation before providing the Commission any
information.\27\ In the commenter's view, it would not be fair or in
the public interest to leave such a whistleblower unprotected during
this interim period between reporting internally and filing a Form TCR
with the Commission. This commenter further explained that the
Commission taking enforcement action when companies or individuals
retaliate against whistleblowing activity prior to the filing of a Form
TCR will create additional incentives for employees to report
internally before providing information to the Commission.
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\27\ See MY comment letter.
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c. Final Rule
Having considered the fully supportive comment on Rules 165.19(b)
and 165.20(b), the Commission is adopting these rules as proposed. The
Commission is also re-organizing and making minor changes to proposed
Appendix A to better reflect the fact that either the Commission or a
private litigant can bring an action for a violation of Section
23(h)(1)(A).
By adopting proposed Rule 165.20(b), the Commission is confirming
its decision to revise its 2011 interpretation that it lacks the
statutory authority to bring an enforcement case against an employer
that violates the anti-retaliation prohibition in Section 23(h)(1). The
2011 interpretation failed to fully consider the statutory context of
Section 23 and other CEA provisions. The 2011 interpretation does not
comport with Section 23(h)(1)(A)'s prohibition against retaliation; the
Commission's broad rulemaking authority under Section 23(i); and, the
Commission's general authority to prosecute violations of any CEA
provision (including Section 23(h)(1)(A)) as well as violations of the
Commission's rules and orders under CEA sections 6(c), 6(d), 6b and 6c.
Sections 6(c), 6(d), 6b and 6c of the Act empower the Commission to
take actions for the violation of ``any'' CEA provision or rule or
regulation thereunder. Although Section 23(h)(1)(B) provides a private
right of action, nothing in that sub-section purports to limit the
Commission's general enforcement authority or suggests that the private
right of action is exclusive.
With regard to Rule 165.20(c), the Commission has decided, after
considering the comments received, to adopt it with some modification.
The Commission believes these revisions will further encourage
whistleblowers to report internally\28\ as well as deter retaliatory
practices against whistleblowers.
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\28\ The part 165 Rules encourage whistleblowers to report
internally prior to reporting to the Commission. Rule 165.2(l)(2),
discussed above, allows a whistleblower to retain original source
status after reporting internally. Additionally, Rule 165.9(b)(4)
includes in the factors that may increase the amount of an award
whether and the extent to which a whistleblower reported the
possible violations through internal whistleblower, legal, or
compliance procedures before or at the same time as reporting those
violations to the Commission, and whether and the extent to which a
whistleblower assisted any internal investigation or inquiry
concerning the reported violations.
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It would be inconsistent for the Commission to encourage internal
reporting by whistleblowers and not extend to them anti-retaliation
[[Page 24494]]
protections to the extent the CEA permits. To do so would place
whistleblowers who report internally in a worse position than
whistleblowers who do not report internally prior to reporting to the
Commission, forcing whistleblowers to choose between reporting
internally first in the hopes of increasing any award or foregoing
reporting internally in order to preserve anti-retaliation protections.
However, the anti-retaliation protections in the CEA do not extend
to all whistleblowers who report internally. Section 23(h) and Rule
165.20(a) provide that the whistleblower in a private action or the
Commission in an enforcement action must be able to show that
retaliation occurred because of any lawful act done by the
whistleblower in providing information to the Commission in accordance
with the part 165 rules, or assisting in any investigation or judicial
or administrative action of the Commission based upon or related to
such information. The ability to make this showing will depend on the
facts and circumstances of a particular case. Actions that an employer
took after a whistleblower reported internally but before providing
information to the Commission may be relevant to whether retaliation
that is prohibited under Section 23(h)(1) occurred. For this reason,
the Commission is adding language to Rule 165.20(b) to explicitly
recognize this possibility.
Payment of Awards
a. Comment Received
The Commission proposed no revisions to Rule 165.14 on the payment
of awards. However, the Commission received one comment regarding the
payment of awards.\29\ This commenter noted that the current part 165
Rules do not make available the payment of the minimum amount of an
award (10%) until the whistleblower's time to appeal has expired, and
suggested that the rules be amended to provide for payment of the
minimum amount of an award at the time the order of award is issued.
This commenter argued that once an award has been ordered by the
Commission, the Commission has admitted that there is an entitlement to
an award and the Commission is estopped from later removing an award
during the appeal process. In addition, this commenter stated that
often the elapsed time between the whistleblower's original tip and any
award is measured in years, not weeks or months, and that waiting on
the resolution of any appeals would only lengthen that timeframe.
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\29\ See GS2Law comment letter.
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b. Final Rule
The Commission declines the request to amend Rule 165.14 to permit
payment of any portion of an award prior to the completion of the
appeals process for all whistleblower award claims arising from a NCA
or Related Action.
Section 23(f)(2) provides that the Commission's determination to
whom to pay an award and the amount of any award is appealable to the
appropriate U.S. Court of Appeals. In response to an appeal from a
whistleblower who received no award from the Commission or who
disagreed with the amount of a Commission award, a Court of Appeals
could set aside the Commission's decision to make an award to another
whistleblower under the same NCA or Related Action if that award
decision does not meet the applicable standard of review.\30\ This
possibility makes it prudent for the Commission to refrain from paying
any portion of an award until the completion of the appeals process for
all whistleblower award claims arising from an NCA or a Related Action
as provided in Rule 165.14(b)(2). As a result, the Commission is not
making any changes to Rule 165.14 in response to the comment.
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\30\ 7 U.S.C. 26(f)(3) states that the court shall review the
determination made by the Commission in accordance with section 706
of title 5.
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Office of Consumer Outreach
a. Amendment
The office formerly known as the Office of Consumer Outreach has
changed its name to the Office of Customer Education and Outreach. The
Commission is renaming the Office in Rule 165.12. Because Rule 165.12
is a rule of the Commission's ``organization, procedure or practice''
the Commission need not present this revision for notice and
comment.\31\
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\31\ See 5 U.S.C. 553.
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Conforming and Technical Amendments
a. Proposed Amendments
To conform to the proposed changes to Rules 165.7 and 165.15, the
Commission proposed to strike the reference to ``or its delegate'' in
Rule 165.11 in the undesignated material before paragraph (a).
The Commission proposed to amend Rule 165.2(i)(2) concerning the
definition of information that led to a successful enforcement action
because it contains an erroneous cross-reference. The reference is
intended to be to 165.2(l) regarding the definition of original source.
The rule currently refers to paragraph (i) of this section.
The Commission proposed to make a minor change to the wording of
Rule 165.3 concerning the procedures for submitting original
information because it contains an erroneous reference to a two-step
process. This change makes the language conform to the process
previously adopted.\32\
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\32\ Whistleblower Incentives and Protection, 76 FR at 53183
(Aug. 25, 2011) (explaining that the rule was adopted with a more
streamlined process and one less form than the original proposal).
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The Commission proposed to amend Rule 165.13(b) concerning appeals
because it contains an erroneous cross-reference. The reference
intended is to Rule 165.10 regarding contents of the record, rather
than Rule 165.9 regarding criteria for determining award amounts.
The Commission proposed to move and include updated Form TCR and
Form WB-APP in a new appendix B to part 165. The updated Form TCR and
Form WB-APP include revisions that previously received information
collection requirement approval by the Office of Management and
Budget.\33\ The Commission also proposed revisions to the submission
instructions portions of the forms to conform to the proposed revisions
in the part 165 Rules.
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\33\ The Form TCR and Form WB-APP OMB Control Number is 3038-
0082. Both forms last received OMB approval on April 8, 2015, with
an expiration date of April 30, 2018.
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Finally, the Commission proposed to make a minor change in the
wording of current Sec. 165.7(e), in addition to designating current
paragraph (e) as new paragraph (l).
b. Comments Received
The Commission received no comments regarding the proposed
conforming and technical amendments.
c. Final Rules
The Commission has decided to adopt the conforming and technical
amendments as proposed.
III. Related Matters
A. Regulatory Flexibility Certification
The Regulatory Flexibility Act \34\ requires that agencies consider
whether the rules they propose will have a significant economic impact
on a substantial number of small entities and, if so, provide a
regulatory flexibility analysis respecting the impact.\35\ In the
Commission's Proposing Release, the Chairman, on behalf of the
Commission, certified that
[[Page 24495]]
a regulatory flexibility analysis is not required because the persons
that would be subject to the rules--individuals--are not ``small
entities'' for purposes of the Regulatory Flexibility Act and the rules
therefore would not have a significant economic impact on a substantial
number of small entities. The Commission received no comments regarding
this conclusion.
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\34\ 5 U.S.C. 601, et seq.
\35\ Id.
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B. Paperwork Reduction Act
The Paperwork Reduction Act (PRA), 44 U.S.C. 3501-3521, imposes
certain requirements on federal agencies (including the Commission) in
connection with their conducting or sponsoring any collection of
information as defined by the PRA. The Commission believes that the
amendments will not impose new recordkeeping or information collection
requirements that require approval by the Office of Management and
Budget under the PRA.
C. Cost-Benefit Considerations
CEA Section 15(a) requires the Commission to consider the costs and
benefits of its actions before promulgating a regulation under the CEA
or issuing certain orders.\36\ Section 15(a) further specifies that the
costs and benefits shall be evaluated in light of the following five
factors: (1) Protection of market participants and the public; (2)
efficiency, competitiveness, and financial integrity of futures
markets; (3) price discovery; (4) sound risk management practices; and
(5) other public interest considerations. The Commission considers the
costs and benefits resulting from its discretionary determinations with
respect to the Section 15(a) factors. The Commission may in its
discretion give greater weight to any one of the five enumerated areas
and could in its discretion determine that, notwithstanding its costs,
a particular rule is necessary or appropriate to protect the public
interest or to effectuate any of the provisions or accomplish any of
the purposes of the CEA.
---------------------------------------------------------------------------
\36\ 7 U.S.C. 19(a).
---------------------------------------------------------------------------
Since the basic framework of part 165 remains substantially
unchanged, the Commission believes that the costs and benefits of the
rule amendments and the status quo baseline (the current rule), to
which the rules' costs and benefits are compared, are similar, but with
certain additional benefits attendant to these amendments.\37\ The Rule
165.7 amendments will add transparency to the Commission's process of
deciding whistleblower award claims and will harmonize the Commission's
rules with those of the SEC. The amendments clarify each step of the
process that a whistleblower must follow when making an award claim.
The Commission believes that such transparency and harmonization will
increase the benefits of the part 165 Rules relative to the benefits of
the current rules because potential whistleblowers will have greater
clarity about the claims and awards process and greater assurance that
retaliation will not be tolerated. The Commission believes this clarity
and protection will encourage whistleblowers to step forward. Thus, the
rules should enhance protection of market participants and the public
as well as market integrity without materially adding to the costs
attendant to the current regime.
---------------------------------------------------------------------------
\37\ The Commission believes that there is not likely to be any
material difference between the amendments and the status quo
baseline in terms of cost.
---------------------------------------------------------------------------
The Rule 165.4 and 165.15 amendments assign to the Director of the
Division of Enforcement the authority to administer the whistleblower
program and release whistleblower identifying information. Since these
amendments relate solely to the Commission's allocation of authority
among its staff, the Commission believes that these changes will impose
no material costs on market participants or the public. At the same
time, the Commission believes the protection of market participants and
the public will be enhanced through a more effective and efficient
deployment of staff resources.
The Rule 165.19 and 165.20 amendments clarify the anti-retaliation
protections available under the Commission's whistleblower program in
light of the Commission's reconsideration of its authority under
Section 23(h)(1) in conjunction with Sections 6(c), 6(d), 6b, 6c, and
23(i) of the CEA. These changes remove any gap in enforcement authority
between the Commission and the SEC with regard to whistleblower
protections against retaliation. The Commission believes that these
changes will impose no material costs on market participants or the
public. The rules do not impose any new regulatory burden.\38\ To
comply with the rules, market participants must refrain from engaging
in conduct that is already subject to private rights of action, or
including certain provisions waiving rights and remedies or requiring
arbitration of disputes in employment agreements. The Commission
further believes that the rules will have a positive effect on
efficiency, competitiveness, and financial integrity of the markets
that the Commission regulates through improving detection and
remediation of potential violations of the CEA and Commission
regulations. For instance, market participants may be further deterred
from engaging in violations of the CEA and Commission rules because the
likelihood of being caught has increased due to improvements to the
whistleblower program that encourage more whistleblowers to provide
information to the Commission.
---------------------------------------------------------------------------
\38\ The Commission believes that the new rule provision
regarding Commission enforcement does not significantly affect any
reliance interests because the provision relates to conduct that is
already prohibited by Section 23 of the CEA.
---------------------------------------------------------------------------
The Commission believes that price discovery and sound risk
management practices will not be materially affected by the amendments.
Also, the Commission has not identified any other relevant public
interest considerations.
The Commission invited public comment on its cost-benefit
considerations, including the Section 15(a) factors described above.
Commenters were invited to submit any data or other information that
they had that quantified or qualified the costs and benefits of the
Proposal. None of the commenters submitted any data or other
information that quantified or qualified the costs and benefits of the
proposed rules, nor did they otherwise comment on the cost-benefit
considerations as stated in the proposed rules.
Alternatives Suggested by Commenters
The Commission adopts several alternatives and makes certain
clarifications as suggested by commenters to the proposal:
After consideration of the comments on Rule 165.2(l), the
Commission adopts the rule with one change and a correction. The
Commission is adding foreign futures authorities to the authorities and
entities to which a claimant may provide information prior to filing a
Form TCR and retain original source status.
The Commission clarifies that the 180-day timeframe in
Rule 165.2(l)(2) relates only to the date on which the Commission will
consider a whistleblower's original information to have been received.
Filing a Form TCR more than 180 days after reporting information to
another authority does not strip a whistleblower of original source
status or render a whistleblower ineligible for an award.
The Commission is adopting Rule 165.4(a)(2) as proposed,
with a minor change. Section 23(h)(2)(C)(i), Rule 165.4(a)(2), and the
Privacy Act Notice on Form TCR identify for
[[Page 24496]]
whistleblowers the entities with which whistleblower identifying
information may be shared.
Section 23(h)(2)(C)(i)(III) limits the self-regulatory
organizations with which confidential whistleblower information can be
shared to those self-regulatory organizations that fit within the
definition in section 3(a) of the Securities Exchange Act of 1934.\39\
The Commission is making conforming amendments throughout the part 165
Rules to clarify that a self-regulatory organization is a self-
regulatory organization as defined by section 3(a) of the Securities
Exchange Act of 1934.
---------------------------------------------------------------------------
\39\ Infra, footnote 24.
---------------------------------------------------------------------------
The Commission has determined to remove Question E.8 on
Form TCR. The wording of this question was not consistent with the
authority granted to the Commission to share whistleblower identifying
information in Section 23(h)(C)(i) and the language of Rule
165.4(a)(2). The Privacy Act Notice in Form TCR puts potential
whistleblowers on notice that the information that they provide to the
Commission may be shared with other authorities.
The Commission has decided to adopt Rule 165.20(c) with
some modification. The anti-retaliation protections in the CEA do not
extend to all whistleblowers who report internally. Actions that an
employer took after a whistleblower reported internally but before
providing information to the Commission may be relevant to whether
retaliation that is prohibited under Section 23(h)(1) occurred. For
this reason, the Commission is adding language to Rule 165.20(b) to
explicitly recognize this possibility.
The Commission also received alternatives to the final rule from
commenters that it chooses not to adopt:
The Commission does not elect to extend the deadline
beyond 180 days under 165.2(l) to retain status as the original source
of information after first submitting the information to Congress, any
federal or state authority, a registered entity, a registered futures
association, a self-regulatory organization, or to any persons
described in paragraphs (g)(4) and (5) of Rule 165.2 to be eligible for
an award. The Commission believes that 180 days provides ample time for
a whistleblower to provide information to the Commission after
submitting the information to any of the aforementioned entities or
authorities.
The Commission declines a commenter's request that the
Commission publish NCAs for Related Actions. The Commission believes
that doing so would be unworkable and burdensome for the Commission.
Publishing NCAs on all criminal and civil actions that may become
related actions would require staff to track, monitor, and report on
many actions that are not Commission actions.
The Commission has chosen not to further revise Proposed
Rules 165.10 and 165.13 to not categorically exclude from the record
pre-decisional and internal deliberative process materials prepared to
assist the Commission in award determinations. Under Rules 165.10 and
165.13, all factual materials relied on by Claims Review Staff or the
Commission in making an award determination will be available to the
claimant and reviewing court. The Commission believes that pre-
decisional or internal deliberative process materials that are prepared
to assist the Commission or Claims Review Staff are protected by
attorney-client privilege as well as attorney work product under well
settled law. Similarly, the exclusion of any documents or materials
provided by a third-party that have not been authorized for release by
the third-party does not deny the claimant due process because these
materials will not be considered by the Commission or Claims Review
Staff in reaching a decision on the award claim.
The Commission declines the request to amend Rule 165.14
to permit payment of any portion of an award prior to the completion of
the appeals process for all whistleblower award claims arising from a
NCA or related action. Section 23(f)(2) provides that the Commission's
determination to whom to pay an award and the amount of any award is
appealable to the appropriate U.S. Court of Appeals. In response to an
appeal from a whistleblower who received no award from the Commission
or who disagreed with the amount of a Commission award, a Court of
Appeals could set aside the Commission's decision to make an award to
another whistleblower under the same NCA or Related Action if that
award decision does not meet the applicable standard of review.\40\
This possibility makes it prudent for the Commission to refrain from
paying any portion of an award until the completion of the appeals
process for all whistleblower award claims arising from an NCA or a
related action as provided in Rule 165.14(b)(2).
---------------------------------------------------------------------------
\40\ Infra, footnote 30.
---------------------------------------------------------------------------
The Commission does not believe that Commission monitoring
of the treatment of confidential whistleblower information by a
receiving authority is necessary. Receiving authorities are bound by
the same confidentiality provisions as the Commission. The Commission
makes sure that a receiving authority understands these limitations
when it shares confidential whistleblower information with them.
D. Antitrust Considerations
Section 15(b) of the CEA requires the Commission to consider the
public interests protected by the antitrust laws and to take actions
involving the least anti-competitive means of achieving the objectives
of the CEA. The Commission believes that the rules may have a positive
effect on competition through improving detection, deterrence, and
remediation of potential violations of the CEA and Commission
regulations.
The Commission did not receive any comments on any antitrust
considerations arising from the proposed amendments.
E. Small Business Regulatory Enforcement Fairness Act
Under the Small Business Regulatory Enforcement Fairness Act of
1996 (SBREFA), Pub. L. 104-121 (March 29, 1996), as amended by Pub. L.
110-28 (May 25, 2007), the Commission solicits data to determine
whether a proposed rule constitutes a ``major'' rule. Under SBREFA, a
rule is considered ``major'' where, if adopted, it results or is likely
to result in:
An annual effect on the economy of $100 million or more
(either in the form of an increase or a decrease);
A major increase in costs or prices for consumers or
individual industries; or
Significant adverse effects on competition, investment or
innovation.
If a rule is ``major,'' its effectiveness will generally be delayed
for 60 days pending Congressional review.
The Commission received no comments or data on: The potential
annual effect on the economy; any increase in costs or prices for
consumers or individual industries; and any potential effect on
competition, investment or innovation and the Chairman certifies that
these amendments do not constitute a ``major rule''.
List of Subjects in 17 CFR Part 165
Whistleblowing.
For the reasons set forth in the preamble, the Commodity Futures
Trading Commission amends 17 CFR part 165 as follows:
PART 165--WHISTLEBLOWER RULES
0
1. The authority citation for part 165 is revised to read as follows:
Authority: 7 U.S.C. 2, 5, 9, 12a(5), 13a, 13a-1, 13b, and 26.
[[Page 24497]]
0
2. In Sec. 165.2, revise paragraphs (i)(2) and (3), (l)(1)(i), (l)(2),
and (o) to read as follows:
Sec. 165.2 Definitions.
* * * * *
(i) * * *
(2) The whistleblower gave the Commission original information
about conduct that was already under examination or investigation by
the Commission, the Congress, any other authority of the federal
government, a state Attorney General or securities regulatory
authority, any registered entity, registered futures association, or
self-regulatory organization (as defined in section 3(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)), foreign futures
authority, or the Public Company Accounting Oversight Board (except in
cases where the whistleblower was an original source of this
information as defined in paragraph (l) of this section), and the
whistleblower's submission significantly contributed to the success of
the action.
(3) The whistleblower reported original information through an
entity's internal whistleblower, legal, or compliance procedures for
reporting allegations of possible violations of law before or at the
same time the whistleblower reported them to the Commission; the entity
later provided the whistleblower's information to the Commission, or
provided results of an audit or investigation initiated in whole or in
part in response to information the whistleblower reported to the
entity; and the information the entity provided to the Commission
satisfies either paragraph (i)(1) or (2) of this section. Under this
paragraph (i)(3), the whistleblower must also submit the same
information to the Commission in accordance with the procedures set
forth in Sec. 165.3 within 180 days of providing it to the entity.
* * * * *
(l) * * *
(1) * * *
(i) In order to be considered an original source of information
that the Commission receives from Congress, any other federal, state or
local authority, a foreign futures authority, any registered entity,
registered futures association, or any self-regulatory organization (as
defined in section 3(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78c(a)), the whistleblower must have voluntarily given such
authorities the information within the meaning of this part. In
determining whether the whistleblower is the original source of
information, the Commission may seek assistance and confirmation from
one of the other entities or authorities described in this paragraph
(l)(1)(i).
* * * * *
(2) Information first provided to another authority or person. If
the whistleblower provides information to Congress, any other federal,
state, or local authority, a foreign futures authority, a registered
entity, a registered futures association, a self-regulatory
organization (as defined in section 3(a) of the Securities Exchange Act
of 1934 (15 U.S.C. 78c(a)), or to any of the persons described in
paragraphs (g)(4) and (5) of this section, and the whistleblower,
within 180 days, makes a submission to the Commission pursuant to Sec.
165.3, as the whistleblower must do in order for the whistleblower to
be eligible to be considered for an award, then, for purposes of
evaluating the whistleblower's claim to an award under Sec. 165.7, the
Commission will consider that the whistleblower provided original
information as of the date of the whistleblower's original disclosure,
report, or submission to one of these other authorities or persons. The
whistleblower must establish the whistleblower's status as the original
source of such information, as well as the effective date of any prior
disclosure, report, or submission, to the Commission's satisfaction.
The Commission may seek assistance and confirmation from the other
authority or person in making this determination.
* * * * *
(o) Voluntary submission or voluntarily submitted. (1) The phrase
``voluntary submission'' or ``voluntarily submitted'' within the
context of submission of original information to the Commission under
this part, shall mean the provision of information made prior to any
request from the Commission, Congress, any other federal or state
authority, the Department of Justice, a registered entity, a registered
futures association, or a self-regulatory organization (as defined in
section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a))
to the whistleblower or anyone representing the whistleblower (such as
an attorney) about a matter to which the information in the
whistleblower's submission is relevant. If the Commission or any of
these other authorities makes a request, inquiry, or demand to the
whistleblower or the whistleblower's representative first, the
whistleblower's submission will not be considered voluntary, and the
whistleblower will not be eligible for an award, even if the
whistleblower's response is not compelled by subpoena or other
applicable law. For purposes of this paragraph (o), the whistleblower
will be considered to have received a request, inquiry or demand if
documents or information from the whistleblower is within the scope of
a request, inquiry, or demand that the whistleblower's employer
receives, unless, after receiving the documents or information from the
whistleblower, the whistleblower's employer fails to provide the
whistleblower's documents or information to the requesting authority in
a timely manner.
(2) In addition, the whistleblower's submission will not be
considered voluntary if the whistleblower is under a pre-existing legal
or contractual duty to report the violations that are the subject of
the whistleblower's original information to the Commission, Congress,
any other federal or state authority, the Department of Justice, a
registered entity, a registered futures association, or a self-
regulatory organization (as defined in section 3(a) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a)), or a duty that arises out of a
judicial or administrative order.
* * * * *
0
3. Amend Sec. 165.3 as follows:
0
a. Remove the introductory text; and
0
b. Revise paragraphs (a) introductory text and (a)(1).
The revisions read as follows:
Sec. 165.3 Procedures for submitting original information.
(a) A whistleblower will need to submit the whistleblower's
information to the Commission. A whistleblower may submit the
whistleblower's information:
(1) By completing and submitting a Form TCR online and submitting
it electronically through the Commission's Web site at https://www.cftc.gov, or the Commission's Whistleblower Program Web site at
www.whistleblower.gov; or
* * * * *
0
4. In Sec. 165.4, revise paragraphs (a) introductory text and (a)(1)
and (2) to read as follows:
Sec. 165.4 Confidentiality.
(a) In general. Section 23(h)(2) of the Commodity Exchange Act
requires that the Commission not disclose information that could
reasonably be expected to reveal the identity of a whistleblower,
except that the Commission may disclose such information in the
following circumstances, in accordance with the Privacy Act of 1974 (5
U.S.C. 552a):
(1) When disclosure is required to a defendant or respondent in
connection
[[Page 24498]]
with a public proceeding that the Commission institutes or in another
public proceeding that is filed by an authority to which the Commission
provides the information, as described in paragraph (a)(2) of this
section; or
(2) When the Commission determines that it is necessary to
accomplish the purposes of the Commodity Exchange Act and to protect
customers, it may provide whistleblower information, without the loss
of its status as confidential whistleblower information in the hands of
the Commission, to: The Department of Justice; an appropriate
department or agency of the Federal Government, acting within the scope
of its jurisdiction; a registered entity, registered futures
association, or a self-regulatory organization (as defined in section
3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)); a State
attorney general in connection with a criminal investigation; any
appropriate State department or agency, acting within the scope of its
jurisdiction; or a foreign futures authority; and, as set forth in
section 23(h)(2)(C) of the Commodity Exchange Act, each such entity is
required to maintain the information as confidential in accordance with
the requirements of section 23(h)(2)(A) of the Commodity Exchange Act.
* * * * *
0
5. Revise Sec. 165.5 to read as follows:
Sec. 165.5 Requirements for consideration of an award.
(a) Subject to the eligibility requirements described in this part,
the Commission will pay an award to one or more whistleblowers who:
(1) Provide a voluntary submission to the Commission;
(2) That contains original information; and
(3) That leads to the successful resolution of a covered judicial
or administrative action or successful enforcement of a Related Action
or both; and
(b) In order to be eligible, the whistleblower must:
(1) Have voluntarily provided the Commission original information
in the form and manner that the Commission requires in Sec. 165.3;
(2) Have submitted a claim in response to a Notice of Covered
Action or a final judgment in a Related Action or both;
(3) Provide the Commission, upon its staff's request, certain
additional information, including:
(i) Explanations and other assistance, in the manner and form that
staff may request, in order that the staff may evaluate the use of the
information submitted related to the whistleblower's application for an
award;
(ii) All additional information in the whistleblower's possession
that is related to the subject matter of the whistleblower's submission
related to the whistleblower's application for an award; and
(iii) Testimony or other evidence acceptable to the staff relating
to the whistleblower's eligibility for an award; and
(4) If requested by the Whistleblower Office, enter into a
confidentiality agreement in a form acceptable to the Whistleblower
Office, including a provision that a violation of the confidentiality
agreement may lead to the whistleblower's ineligibility to receive an
award.
(c) The Commission may, in its sole discretion, waive any
procedural requirements based upon a showing of extraordinary
circumstances.
0
6. In Sec. 165.6, revise paragraph (a)(1) to read as follows:
Sec. 165.6 Whistleblowers ineligible for an award.
(a) * * *
(1) To any whistleblower who is, or was at the time the
whistleblower acquired the original information submitted to the
Commission, a member, officer, or employee of: the Commission; the
Board of Governors of the Federal Reserve System; the Office of the
Comptroller of the Currency; the Board of Directors of the Federal
Deposit Insurance Corporation; the Director of the Office of Thrift
Supervision; the National Credit Union Administration Board; the
Securities and Exchange Commission; the Department of Justice; a
registered entity; a registered futures association; a self-regulatory
organization (as defined in section 3(a) of the Securities Exchange Act
of 1934 (15 U.S.C. 78c(a)); or a law enforcement organization;
* * * * *
0
7. Amend Sec. 165.7 as follows:
0
a. Revise the section heading;
0
b. Revise paragraphs (b), (d), and (e); and
0
c. Add paragraphs (f) through (l).
The revisions and additions read as follows:
Sec. 165.7 Procedures for award applications in Commission actions
and related actions, and Commission award determinations.
* * * * *
(b)(1) To file a claim for a whistleblower award, the whistleblower
must file Form WB-APP, Application for Award for Original Information
Provided Pursuant to Section 23 of the Commodity Exchange Act. The
whistleblower must sign this form as the claimant and submit it to the
Commission by mail or fax to Commodity Futures Trading Commission,
Three Lafayette Centre, 1155 21st Street NW., Washington, DC 20581, Fax
(202) 418-5975, or by completing and submitting the Form WB-APP online
and submitting it electronically through the Commission's Web site at
https://www.cftc.gov or the Commission's Whistleblower Program Web site
at https://www.whistleblower.gov.
(2) The Form WB-APP, including any attachments, must be received by
the Commission within 90 calendar days of the date of the Notice of
Covered Action or 90 calendar days following the date of a final
judgment in a Related Action (or if the final judgment in a Related
Action was issued prior to the action meeting the definition of Related
Action, within 90 calendar days following the date the action satisfied
the definition of Related Action, except in the circumstances described
in paragraph (b)(3)(ii) of this section). One Form WB-APP may be filed
in response to both a Notice of Covered Action and final judgment in a
Related Action if the relevant time periods are applicable.
(3) If a covered judicial or administrative action and Related
Action have different final judgment dates or if there is no covered
judicial or administrative action connected to a Related Action, a
claimant, who wishes to file a claim for an award in both a covered
judicial or administrative action and a Related Action, or in a Related
Action that does not have a connected covered judicial or
administrative action, must follow one of the following procedures
depending on that claimant's particular situation.
(i) If a final judgment imposing monetary sanctions in a Related
Action has not been entered at the time the claimant submits a claim
for an award in connection with a covered judicial or administrative
action, the claimant must submit the claim for the Related Action on
Form WB-APP within ninety (90) calendar days following the date of
issuance of a final judgment in the Related Action.
(ii) If a final judgment in a Related Action has been entered and a
Notice of Covered Action for a related covered judicial or
administrative action has not been published, a claimant for an award
in both the covered judicial or administrative action and Related
Action may submit the claims for both the Related Action and the
covered judicial or administrative action within ninety (90) days of
the date of the Notice
[[Page 24499]]
of Covered Action. The claims may be submitted on the same Form WB-APP.
(iii) If there is a final judgment in a Related Action that relates
to a judicial or administrative action brought by the Commission under
the Commodity Exchange Act that is not a covered judicial or
administrative action, and therefore there is no Notice of Covered
Action, a claimant for an award in connection with the Related Action
must submit the claim in connection with the Related Action on Form WB-
APP within ninety (90) calendar days following either:
(A) The date of issuance of a final judgment in the Related Action,
if that date is after the date of issuance of the final judgment in the
related Commission judicial or administrative action; or
(B) The date of issuance of the final judgment in the related
Commission judicial or administrative action, i.e., the date the
Related Action becomes a Related Action, if the date of issuance of the
final judgment in the Related Action precedes the final judgment in the
related Commission judicial or administrative action.
* * * * *
(d) A claimant may withdraw a Form WB-APP by submitting a written
request to the Whistleblower Office at any time during the review
process.
(e)(1) The Whistleblower Office may issue a Proposed Final
Disposition for award applications that do not relate to a Notice of
Covered Action, a final judgment in a Related Action, or a previously
filed Form TCR without presentation of the award claim to the staff
designated by the Director of the Division of Enforcement under Sec.
165.15(a)(2) (``Claims Review Staff''). In such instances, the
Whistleblower Office will inform the award claimant in writing that the
claim does not relate to a Notice of Covered Action, a final judgment
in a Related Action, or a previously filed Form TCR and will be
rejected unless the claimant provides additional information. The
claimant will have 30 days from the date of the written notice to
respond and to correct the identified deficiencies. If the claimant
does not respond in 30 days or if the response does not include
information showing that the WB-APP relates to a Notice of Covered
Action, a final judgment in a Related Action, or a previously filed
Form TCR the Whistleblower Office will issue a Proposed Final
Disposition. The claimant's failure to submit a timely response to the
written notice from the Whistleblower Office will constitute a failure
to exhaust administrative remedies, and the claimant will be prohibited
from pursuing an appeal under Sec. 165.13.
(2) The Whistleblower Office will notify the Claims Review Staff of
any Proposed Final Disposition under this paragraph (e). Within thirty
(30) calendar days thereafter, any member of the Claims Review Staff
may request that the Proposed Final Disposition be reviewed by the
Claims Review Staff. If no member of the Claims Review Staff requests
such a review within the 30-day period, then the Proposed Final
Disposition will become the Final Order of the Commission. In the event
that a member of the Claims Review Staff requests a review, the Claims
Review Staff will review the record that the Whistleblower Office
relied upon in making its determination and either remand to the
Whistleblower Office for further action or issue a Final Order of the
Commission, which could consist of the Proposed Final Disposition.
(f)(1) In connection with each individual covered judicial or
administrative action or final judgment in a Related Action, for which
an award application is submitted, once the time for filing any appeals
of the covered judicial or administrative action or the final judgment
in the Related Action has expired (or, where an appeal is filed of the
covered judicial or administrative action, or the final judgment in a
Related Action, as applicable, and concluded), the Claims Review Staff
designated under Sec. 165.15(a)(2) will evaluate all timely
whistleblower award claims submitted on Form WB-APP in response to a
Notice of Covered Action, referenced in paragraph (a) of this section,
or final judgment in a Related Action in accordance with the criteria
set forth in this part.
(2) The Whistleblower Office may require that the claimant provide
additional information relating to the claimant's eligibility for an
award or satisfaction of any of the conditions for an award, as set
forth in Sec. 165.5(b)(2). The Whistleblower Office may also request
additional information from the claimant in connection with the claim
for an award in a Related Action to demonstrate that the claimant
directly (or through the Commission) voluntarily provided the
governmental agency, regulatory authority or self-regulatory
organization the original information that led to the Commission's
successful covered action, and that the information provided by the
claimant led to the successful enforcement of the Related Action. The
Whistleblower Office may also, in its discretion, seek assistance and
confirmation from the other agency in making this determination.
(g)(1) Following Claims Review Staff evaluation, the Claims Review
Staff will issue a Preliminary Determination setting forth a
preliminary assessment as to whether the claim should be granted or
denied and, if granted, setting forth the proposed award percentage
amount. The Whistleblower Office will send a copy of the Preliminary
Determination to the claimant.
(2) The claimant may contest the Preliminary Determination made by
the Claims Review Staff by submitting a written response to the
Whistleblower Office setting forth the grounds for the claimant's
objection to either the denial of an award or the proposed amount of an
award. The response must be in the form and manner that the
Whistleblower Office shall require. The claimant may also include
documentation or other evidentiary support for the grounds advanced in
the claimant's response. The claimant may also request a meeting with
the Whistleblower Office within the timeframes provided in this
paragraph (g), however such meetings are not required, and the
Whistleblower Office may in its sole discretion deny the request.
(i) Before determining whether to contest a Preliminary
Determination, the claimant may, within thirty (30) days of the date of
the Preliminary Determination, request that the Whistleblower Office
make available for the claimant's review the materials from among those
set forth in Sec. 165.10 that formed the basis of the Claims Review
Staff's Preliminary Determination.
(ii) If the claimant decides to contest the Preliminary
Determination, the claimant must submit the claimant's written response
and supporting materials setting forth the grounds for the claimant's
objection to either the denial of an award or the proposed amount of an
award within sixty (60) calendar days of the date of the Preliminary
Determination, or if a request to review materials used to make a
Preliminary Determination is made pursuant to paragraph (g)(2)(i) of
this section, then within sixty (60) calendar days of the Whistleblower
Office making those materials available for the claimant's review. The
claimant also may request a meeting with the Whistleblower Office
within those same sixty (60) calendar days. However, such meetings are
not required and the Whistleblower Office may in its sole discretion
decline the request.
(h) If the claimant fails to submit a timely response pursuant to
paragraph (g) of this section, then the Preliminary Determination will
become the Final Order of the Commission (except where
[[Page 24500]]
the Preliminary Determination recommended an award, in which case the
Preliminary Determination will be deemed a Proposed Final Determination
for purposes of paragraph (j) of this section). The claimant's failure
to submit a timely response contesting a Preliminary Determination will
constitute a failure to exhaust administrative remedies, and the
claimant will be prohibited from pursuing an appeal under Sec. 165.13.
(i) If the claimant submits a timely response under paragraph (g)
of this section, then the Claims Review Staff will consider the issues
and grounds advanced in the claimant's response, along with any
supporting documentation the claimant provided, and will make its
Proposed Final Determination.
(j) The Whistleblower Office will notify the Commission of each
Proposed Final Determination. Within thirty (30) calendar days
thereafter, any Commissioner may request that the Proposed Final
Determination be reviewed by the Commission. If no Commissioner
requests such a review within the 30-day period, then the Proposed
Final Determination will become the Final Order of the Commission. In
the event a Commissioner requests a review, the Commission will review
the record that the staff relied upon in making its determinations,
including the claimant's submissions to the Whistleblower Office, and
issue its Final Order.
(k) A Preliminary Determination, Proposed Final Disposition, or a
Proposed Final Determination may be issued only after a review for
legal sufficiency by the Office of the General Counsel.
(l) The Office of the Secretariat will serve the claimant with the
Final Order of the Commission.
0
8. In Sec. 165.9, revise the introductory text to read as follows:
Sec. 165.9 Criteria for determining amount of award.
The determination of the amount of an award shall be in the
discretion of the Commission. This discretion shall be exercised as
prescribed by Sec. 165.7.
* * * * *
0
9. Amend Sec. 165.10 as follows:
0
a. Revise the section heading;
0
b. Remove the word ``and'' at the end of paragraph (a)(6);
0
c. Remove the period at the end of paragraph (a)(7) and add a semicolon
in its place;
0
d. Add paragraphs (a)(8) and (9); and
0
e. Revise paragraph (b).
The revisions and additions read as follows:
Sec. 165.10 Contents of record for award determination.
(a) * * *
(8) With respect to an award claim involving a Related Action, any
statements or other information that an entity provides or identifies
in connection with an award determination, provided the entity has
authorized the Commission to share the information with the claimant.
(Neither the Commission nor the Claims Review Staff may rely upon
information that the entity has not authorized the Commission to share
with the applicant); and
(9) Any other documents or materials including sworn declarations
from third-parties that are received or obtained by the Whistleblower
Office to assist the Commission resolve the applicant's award
application, including information related to the claimant's
eligibility. (Neither the Commission nor the Claims Review Staff may
rely upon information that a third party has not authorized the
Commission to share with the claimant).
(b) The rules in this part do not entitle a claimant to obtain from
the Commission any materials (including any pre-decisional or internal
deliberative process materials that are prepared to assist the
Commission or Claims Review Staff in deciding the claim) other than
those listed in paragraph (a) of this section. The Whistleblower Office
may make redactions as necessary to comply with any statutory
restrictions, to protect the Commission's law enforcement and
regulatory functions, and to comply with requests for confidential
treatment from other law enforcement and regulatory authorities.
0
10. Revise Sec. 165.11 to read as follows:
Sec. 165.11 Awards based upon related actions.
(a) Provided that a whistleblower or whistleblowers comply with the
requirements in Sec. Sec. 165.3, 165.5 and 165.7, and pursuant to
Sec. 165.8, the Commission may grant an award based on the amount of
monetary sanctions collected in a ``Related Action'' or ``Related
Actions'', where:
(1) A ``Related Action'' is a judicial or administrative action
that is brought by:
(i) The Department of Justice;
(ii) An appropriate department or agency of the Federal Government,
acting within the scope of its jurisdiction;
(iii) A registered entity, registered futures association, or self-
regulatory organization (as defined in section 3(a) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a));
(iv) A State criminal or appropriate civil agency, acting within
the scope of its jurisdiction; or
(v) A foreign futures authority; and
(2) The ``Related Action'' is based on the original information
that the whistleblower voluntarily submitted to the Commission and led
to a successful resolution of the Commission judicial or administrative
action.
(b) The Commission will not make an award to a claimant for a final
judgment in a Related Action if the claimant has already been granted
an award by the Securities and Exchange Commission (SEC) for that same
action pursuant to its whistleblower award program under section 21F of
the Securities Exchange Act (15 U.S.C. 78a et seq.). If the SEC has
previously denied an award to the claimant for a judgment in a Related
Action, the whistleblower will be precluded from relitigating any
issues before the Commission that the SEC resolved against the claimant
as part of the award denial.
0
11. In Sec. 165.12, revise paragraph (c) to read as follows:
Sec. 165.12 Payment of awards from the Fund, financing of customer
education initiatives, and deposits and credits to the Fund.
* * * * *
(c) Office of Customer Education and Outreach. The Commission shall
undertake and maintain customer education initiatives through its
Office of Customer Education and Outreach. The initiatives shall be
designed to help customers protect themselves against fraud or other
violations of the Commodity Exchange Act, or the rules or regulations
thereunder. The Commission shall fund the initiatives and may utilize
funds deposited into the Fund during any fiscal year in which the
beginning (October 1) balance of the Fund is greater than $10,000,000.
The Commission shall budget, on an annual basis, the amount used to
finance customer education initiatives, taking into consideration the
balance of the Fund.
0
12. Revise Sec. 165.13 to read as follows:
Sec. 165.13 Appeals.
(a) Any Final Order of the Commission relating to a whistleblower
award determination, including whether, to whom, or in what amount to
make whistleblower awards, may be appealed to the appropriate court of
appeals of the United States not more than 30 days after the Final
Order of the Commission is issued, provided that administrative
remedies have been exhausted.
[[Page 24501]]
(b) The record on appeal shall consist of:
(1) The Contents of Record for Award Determinations, as set forth
in Sec. 165.10. The record on appeal shall not include any pre-
decisional or internal deliberative process materials that are prepared
to assist the Commission or the Claims Review Staff in deciding the
claim (including staff's draft Preliminary Determination or any
Proposed Final Determination or staff's draft final determination); and
(2) The Preliminary Determination and the Final Order of the
Commission, as set forth in Sec. 165.7.
0
13. Revise Sec. 165.15 to read as follows:
Sec. 165.15 Administering the whistleblower program.
(a) Specific authorities--(1) Payments, deposits, and credits. The
Executive Director is authorized to deposit into or credit collected
monetary sanctions to the Fund, and to make payment of awards
therefrom, with the concurrence of the General Counsel and the Director
of the Division of Enforcement, or of their respective designees.
(2) Designation of claims review staff. The Claims Review Staff
referenced in Sec. 165.7 shall be composed of no fewer than three and
no more than five staff members from any of the Commission's Offices or
Divisions (except the Office of General Counsel) who have not had
direct involvement in the underlying enforcement action, as designated
by the Director of the Division of Enforcement in consultation with the
Executive Director. The Claims Review Staff will always include at
least one staff member who does not work in the Division of
Enforcement.
(3) Disclosure of whistleblower identifying information. The
Director of the Division of Enforcement is authorized on behalf of the
Commission to exercise its discretion to disclose whistleblower
identifying information under Sec. 165.4(a).
(b) General authority to administer the program. The Director of
the Division of Enforcement shall have general authority to administer
the whistleblower program except as otherwise provided under this part.
0
14. Revise Sec. 165.19 to read as follows:
Sec. 165.19 Nonenforceability of certain provisions waiving rights
and remedies or requiring arbitration of disputes.
(a) Non-waiver. The rights and remedies provided for in this part
may not be waived by any agreement, policy, form, or condition of
employment, including by a predispute arbitration agreement. No
predispute arbitration agreement shall be valid or enforceable if the
agreement requires arbitration of a dispute arising under this part.
(b) Protected communications. No person may take any action to
impede an individual from communicating directly with the Commission's
staff about a possible violation of the Commodity Exchange Act,
including by enforcing, or threatening to enforce, a confidentiality
agreement or predispute arbitration agreement with respect to such
communications.
0
15. Add Sec. 165.20 to read as follows:
Sec. 165.20 Whistleblower anti-retaliation protections.
(a) In general. No employer may discharge, demote, suspend,
directly or indirectly threaten or harass, or in any other manner
discriminate against, a whistleblower in the terms and conditions of
employment because of any lawful act done by the whistleblower--
(1) In providing information to the Commission in accordance with
this part; or
(2) In assisting in any investigation or judicial or administrative
action of the Commission based upon or related to such information.
(b) Anti-retaliation enforcement. Section 23(h)(1)(A) of the
Commodity Exchange Act (7 U.S.C. 26(h)(1)), including the rules in this
part promulgated thereunder, shall be enforceable in an action or
proceeding brought by the Commission including where retaliation is in
response to a whistleblower providing information to the Commission
after reporting the information through internal whistleblower, legal
or compliance procedures.
(c) Protections apply regardless of non-qualification. The anti-
retaliation protections apply whether or not the whistleblower
satisfies the requirements, procedures, and conditions to qualify for
an award.
0
16. Revise appendix A to part 165 to read as follows:
Appendix A to Part 165--Guidance With Respect to the Protection of
Whistleblowers Against Retaliation
(a) In general. Section 23(h)(1) of Commodity Exchange Act
prohibits employers from engaging in retaliation against
whistleblowers. A violation of this provision could be addressed by a
Commission enforcement action, or a lawsuit by an individual. Section
23(h)(1)(B) provides for a federal cause of action brought by the
whistleblower against the employer, which must be filed in the
appropriate district court of the United States within two (2) years of
the employer's retaliatory act, and potential relief for prevailing
whistleblowers, including reinstatement, back pay, and compensation for
other expenses, including reasonable attorney's fees.
(b) Enforcement--(1) Private cause of action. (i) An individual who
alleges discharge, demotion, suspension, direct or indirect threats or
harassment, or any other manner of discrimination in violation of
section 23(h)(1)(A) of the Commodity Exchange Act may bring an action
under section 23(h)(1)(B) of the Commodity Exchange Act in the
appropriate district court of the United States for the relief provided
in section 23(h)(1)(C) of the Commodity Exchange Act, unless the
individual who is alleging discharge or other discrimination in
violation of section 23(h)(1)(A) of the Commodity Exchange Act is an
employee of the Federal Government, in which case the individual shall
only bring an action under section 1221 of title 5, United States Code.
(ii) Subpoenas. A subpoena requiring the attendance of a witness at
a trial or hearing conducted under section 23(h)(1)(B)(ii) of the
Commodity Exchange Act may be served at any place in the United States.
(iii) Statute of limitations. A private cause of action under
section 23(h)(1)(B) of the Commodity Exchange Act may not be brought
more than 2 years after the date on which the violation reported in
section 23(h)(1)(A) of the Commodity Exchange Act is committed.
(iv) Relief. Relief for an individual prevailing in an action
brought under section 23(h)(1)(B) of the Commodity Exchange Act shall
include--
(A) Reinstatement with the same seniority status that the
individual would have had, but for the discrimination;
(B) The amount of back pay otherwise owed to the individual, with
interest; and
(C) Compensation for any special damages sustained as a result of
the discharge or discrimination, including litigation costs, expert
witness fees, and reasonable attorney's fees.
(2) Commission authority to bring action. The Commission may bring
an enforcement action against an employer that retaliates against a
whistleblower by discharge, demotion, suspension, direct or indirect
threats or harassment, or any other manner of discrimination.
0
17. Add appendix B to part 165 to read as follows:
Appendix B to Part 165--Form TCR and Form WP-APP
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Submission Procedures
Questions concerning this form may be directed to Commodity Futures
Trading Commission, Whistleblower Office, Three Lafayette Centre, 1155
21st Street NW., Washington, DC 20581.
If you are submitting information for the CFTC's
whistleblower award program, you must submit your information using
this Form TCR.
You may submit this form electronically, through the Web
portal found on the CFTC's Web site at https://www.whistleblower.gov.
You may also print this form and submit it by mail to Commodity Futures
Trading Commission, Whistleblower Office, Three Lafayette Centre, 1155
21st Street, NW., Washington, DC 20581, or by facsimile to (202) 418-
5975.
You have the right to submit information anonymously. If
you do not submit anonymously, please note that the CFTC is required by
law to maintain the confidentiality of any information which could
reasonably identify you, and will only reveal such information in
limited and specifically-defined circumstances. See 7 U.S.C. 26(h)(2);
17 CFR 165.4. However, in order to receive a whistleblower award, you
will need to be identified to select CFTC staff for a final eligibility
determination, and in unusual circumstances, you may need to be
identified publicly for trial. You should therefore provide some means
for the CFTC's staff to contact you, such as a telephone number or an
email address.
Instructions for Completing Form TCR
General
All references to ``you'' and ``your'' are intended to mean the
complainant.
Section A: Tell Us About Yourself
Questions 1-14: Please provide the following information about
yourself:
[ballot] last name, first name and middle initial;
[ballot] complete address, including city, state and zip code;
[ballot] telephone number and, if available, an alternate number where
you can be reached;
[ballot] your email address (to facilitate communications, we strongly
encourage you to provide an email address, especially if you are filing
anonymously);
[ballot] your preferred method of communication; and
[ballot] your occupation.
Section B: Your Attorney's Information
Complete this section only if you are represented by an attorney in
this matter.
Questions 1-10: Provide the following information about your
attorney:
[ballot] attorney's name;
[ballot] firm name;
[ballot] complete address, including city, state and zip code;
[ballot] telephone number and fax number; and
[ballot] email address.
Section C: Tell Us Who You Are Complaining About
Question 1-2: Choose one of the following that best describes the
individual's profession or the type of entity to which your complaint
relates:
For Individuals: accountant, analyst, associated person, attorney,
auditor, broker, commodity trading advisor, commodity pool operator,
compliance officer, employee, executing broker, executive officer or
director, financial planner, floor broker, floor trader, trader,
unknown or other (specify).
For Entities: bank, commodity pool, commodity pool operator,
commodity trading advisor, futures commission merchant, hedge fund,
introducing broker, major swap participant, retail foreign exchange
dealer, swap dealer, unknown or other (specify).
Questions 3-12: For each individual and/or entity, provide the
following information, if known:
[ballot] full name;
[ballot] complete address, including city, state and zip code;
[ballot] telephone number;
[ballot] email address; and
[ballot] internet address, if applicable.
Questions 13: If the firm or individual you are complaining about
has custody or control of your investment, identify whether you have
had difficulty contacting that firm or individual.
Question 14: Identify if you are, or were, associated with the
individual or firm you are complaining about. If yes, describe how you
are, or were, associated with the individual or firm you are
complaining about.
Question 15: Identify the initial form of contact between you and
the person against whom you are filing this complaint.
Section D: Tell Us About Your Complaint
Question 1: State the date (mm/dd/yyyy) that the alleged conduct
occurred or began.
Question 2: Identify if the conduct is on-going.
Question 3: Choose the option that you believe best describes the
nature of your complaint. If you are alleging more
[[Page 24514]]
than one violation, please list all that you believe may apply.
Question 4: Select the type of product or instrument you are
complaining about.
Question 5: If applicable, please name the product or instrument.
If yes, please describe.
Question 6: Identify whether you have suffered a monetary loss. If
yes, please describe.
Question 7: Identify if the individual or firm you are complaining
about acknowledged their fault.
Question 8: Indicate whether you have taken any other action
regarding your complaint, including whether you complained to the CFTC,
another regulator, a law enforcement agency, or any other agency or
organization, or initiated legal action, mediation, arbitration or any
other action.
If you answered yes, provide details, including the date on which
you took the action(s) described, the name of the person or entity to
whom you directed any report or complaint, and contact information for
the person or entity, if known, and the complete case name, case number
and forum of any legal action you have taken.
Question 9: State in detail all facts pertinent to the alleged
violation. Explain why you believe the facts described constitute a
violation of the Commodity Exchange Act.
Question 10: Describe all supporting materials in your possession
and the availability and location of any additional supporting
materials not in your possession.
Section E: Whistleblower Program
Question 1: Describe how you obtained the information that supports
your allegations. If any information was obtained from an attorney or
in a communication where an attorney was present, identify such
information with as much particularity as possible. In addition, if any
information was obtained from a public source, identify the source with
as much particularity as possible.
Question 2: Identify any documents or other information in your
submission on this Form TCR that you believe could reasonably be
expected to reveal your identity. Explain the basis for your belief
that your identity would be revealed if the documents or information
were disclosed to a third party.
Question 3: State whether you or your attorney have had any prior
communication(s) with the CFTC concerning this matter.
If you answered ``yes'', identify the CFTC staff member(s) with
whom you or your attorney communicated.
Question 4: Indicate whether you or your attorney have provided the
information you are providing to the CFTC to any other agency or
organization, or whether any other agency or organization has requested
the information or related information from you.
If you answered ``yes'', provide details and the name and contact
information of the point of contact at the other agency or
organization, if known.
Question 5: Indicate whether your complaint relates to an entity of
which you are, or were in the past, an officer, director, counsel,
employee, consultant or contractor.
If you answered ``yes'', state whether you have reported this
violation to your supervisor, compliance office, whistleblower hotline,
ombudsman, or any other available mechanism at the entity for reporting
violations. Please provide details, including the date on which you
took the action.
Question 6: Indicate whether you have taken any other action
regarding your complaint, including whether you complained to the CFTC,
another regulator, a law enforcement agency, or any other agency or
organization, or initiated legal action, mediation, arbitration or any
other action.
If you answered ``yes'', provide details, including the date on
which you took the action(s) described, the name of the person or
entity to whom you directed any report or complaint, and contact
information for the person or entity, if known, and the complete case
name, case number and forum of any legal action you have taken.
Question 7: Provide any additional information you think may be
relevant.
Section F: Whistleblower Eligibility Requirements and Other Information
Question 1: State whether you are currently, or were at the time
that you acquired the original information that you are submitting to
the CFTC, a member, officer or employee of: The CFTC; the Board of
Governors of the Federal Reserve System; the Office of the Comptroller
of the Currency; the Board of Directors of the Federal Deposit
Insurance Corporation; the Director of the Office of Thrift
Supervision; the National Credit Union Administration Board; the
Securities and Exchange Commission; the Department of Justice; a
registered entity; a registered futures association; a self-regulatory
organization (as defined in 3(a) of the Securities Exchange Act of 1934
(15 U.S.C. 78c(a)); a law enforcement organization; or a foreign
regulatory authority or law enforcement organization.
Question 2: State whether you are providing the information
pursuant to a cooperation agreement with the CFTC or with another
agency or organization.
Question 3: State whether you are providing this information before
you (or anyone representing you) received any request, inquiry or
demand that relates to the subject matter of this submission (i) from
the CFTC, (ii) in connection with an investigation, inspection or
examination by any registered entity, registered futures association or
self-regulatory organization (as defined in 3(a) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a)), or (iii) in connection with an
investigation by the Congress, or any other federal or state authority.
Question 4: State whether you are currently a subject or target of
a criminal investigation, or whether you have been convicted of a
criminal violation, in connection with the information you are
submitting to the CFTC.
Question 5: State whether you acquired the information you are
providing to the CFTC from any individual described in Questions 1
through 4 of this section.
Question 6: If you answered yes to any of Questions 1 through 5,
please provide details.
Section G: Privacy Notice and Whistleblower's Declaration
You must sign this Declaration if you are submitting this
information pursuant to the CFTC whistleblower program and wish to be
considered for an award. If you are submitting your information using
the electronic version of Form TCR through the CFTC's web portal, you
must check the box to agree with the declaration. If you are submitting
your information anonymously, you must still sign this Declaration
(using the term ``anonymous'') or check the box as appropriate, and, if
you are represented by an attorney, you must provide your attorney with
the original of this signed form, or maintain a copy for your own
records.
Section H: Counsel Certification
If you are submitting this information pursuant to the CFTC
whistleblower program and you are doing so anonymously through an
attorney, your attorney must sign the Counsel Certification Section. If
your attorney is submitting your information using the electronic
version of Form TCR through the CFTC's web portal, he/she must check
the box to agree with the
[[Page 24515]]
certification. If you are represented in this matter but you are not
submitting your information pursuant to the CFTC whistleblower program,
your attorney does not need to sign this Certification or check the
box.
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Privacy Act Statement
This notice is given under the Privacy Act of 1974. The Privacy Act
requires that the Commodity Futures Trading Commission (CFTC) inform
individuals of the following when asking for information. The
solicitation of this information is authorized under the Commodity
Exchange Act, 7 U.S.C. 1 et seq. The information provided will enable
the CFTC to determine the whistleblower award claimant's eligibility
for payment of an award pursuant to Section 23 of the Commodity
Exchange Act and Part 165 of the CFTC's regulations. This information
will be used to investigate and prosecute violations of the Commodity
Exchange Act and the CFTC's regulations. This information may be
disclosed to federal, state, local or foreign agencies or other
authorities responsible for investigating, prosecuting, enforcing or
implementing laws, rules or regulations implicated by the information
consistent with the confidentiality requirements set forth in Section
23 of the Commodity Exchange Act and Part 165 of the CFTC's
regulations. The information will be maintained and additional
disclosures may be made in accordance with System of Records Notices
CFTC-49, ``Whistleblower Records'' (exempted), CFTC-10, ``Investigatory
Records'' (exempted), and CFTC-16, ``Enforcement Case Files.'' The CFTC
requests the last four digits of the claimant's Social Security Number
for use as an individual identifier to administer and manage the
whistleblower award program. Executive Order 9397 (November 22, 1943)
allows federal agencies to use the Social Security Number as an
individual identifier. Furnishing the information is voluntary.
However, if an individual is providing information for the
whistleblower award program, not providing required information may
result in the individual not being eligible for award consideration.
Questions concerning this form may be directed to Commodity Futures
Trading Commission, Whistleblower Office, Three Lafayette Centre, 1155
21st Street NW., Washington, DC 20581.
Submission Procedures
This form must be used by persons making a claim for a
whistleblower award in connection with information provided to the
CFTC, or to another agency or organization in a related action. In
order to be deemed eligible for an award, you must meet all the
requirements set forth in Section 23 of the Commodity Exchange Act and
Part 165 of the CFTC's regulations.
You must sign the Form WB-APP as the claimant. If you wish
to submit the Form WB-APP anonymously, you must do so through an
attorney, your attorney must sign the Counsel Certification Section of
the Form WB-APP that is submitted to the CFTC, and you must give your
attorney your original signed Form WB-APP so that it can be produced to
the CFTC upon request.
During the whistleblower award claim process, your
identity must be verified in a form and manner that is acceptable to
the CFTC prior to the payment of any award.
[cir] If you are filing your claim in connection with information
that you provided to the CFTC, then your Form WB-APP, and any
attachments thereto, must be received by the CFTC within ninety (90)
days of the date of the Notice of Covered Action, or the date of a
final
[[Page 24520]]
judgment in a related action to which the claim relates.
[cir] If you are filing your claim in connection with information
that you provided to another agency or organization in a related
action, then your Form WB-APP, and any attachments thereto, must be
received by the CFTC as follows:
If a final order imposing monetary sanctions has been
entered in a related action at the time that you submit your claim for
an award in connection with a CFTC action, you may submit your claim
for an award in that related action on the same Form WB-APP that you
use for the CFTC action.
If a final order imposing monetary sanctions in a related
action has not been entered at the time that you submit your claim for
an award in connection with a CFTC action, you must submit your claim
on Form WB-APP within ninety (90) days of the issuance of a final order
imposing sanctions in the related action.
If a final order imposing monetary sanctions in a related
action relates to a judicial or administrative action brought by the
Commission under the Commodity Exchange Act that is not a covered
judicial or administrative action, and therefore there would not be a
Notice of Covered Action, you must submit your claim on Form WB-APP for
an award in connection with the related action within ninety (90)
calendar days following either (1) the date of issuance of a final
order in the related action, if that date is after the date of issuance
of the final judgment in the related Commission judicial or
administrative action; or (2) the date of issuance of the final
judgment in the related Commission judicial or administrative action,
i.e., the date the related action becomes a related action, if the date
of issuance of the final order in the related action precedes the final
judgment in the related Commission judicial or administrative action.
To submit your Form WB-APP, you may print it and either
submit it by mail to Commodity Futures Trading Commission,
Whistleblower Office, Three Lafayette Centre, 1155 21st Street NW.,
Washington, DC 20581, or by facsimile to (202) 418-5975. You also may
submit this form electronically, through the web portal found on the
CFTC's Web site at https://www.cftc.gov, which is also accessible from
the CFTC Whistleblower Program Web site at www.whistleblower.gov.
Instructions for Completing Form WB-APP
General
All references to ``you'' and ``your'' are intended to mean the
whistleblower award claimant.
Section A: Tell Us About Yourself
Questions 1-3: Please provide the following information about yourself:
last name, first name, middle initial and the last four
digits of your Social Security Number;
complete address, including city, state and zip code;
telephone number and, if available, an alternate number
where you can be reached; and
your email address (to facilitate communications, we
strongly encourage you to provide an email address, especially if you
are making your claim anonymously).
Section B: Your Attorney's Information
Complete this section only if you are represented by an attorney in
this matter. Questions 1-4: Provide the following information about
your attorney:
attorney's name;
firm name;
complete address, including city, state and zip code;
telephone number and fax number; and
email address.
Section C: Tell Us About Your Tip or Complaint
Question 1a: Indicate the manner in which you submitted your
original information to the CFTC.
Question 1b: Provide the date on which you submitted your original
information to the CFTC.
Question 2a: State whether you filed a CFTC Form TCR.
Question 2b: If you filed a CFTC Form TCR, provide the Form's
number.
Question 2c: If you filed a CFTC Form TCR, provide the date on
which you filed the Form.
Question 3: Provide the name(s) of the individual(s) and/or
entity(s) to which your tip or complaint relates.
Section D: Notice of Covered Action
The process for making a claim for a whistleblower award for a CFTC
action begins with the publication of a ``Notice of Covered Action'' on
the CFTC's Web site. This Notice is published whenever a judicial or
administrative action brought by the CFTC results in the imposition of
monetary sanctions exceeding $1,000,000. The Notice is published on the
CFTC's Web site subsequent to the entry of a final judgment or order in
the action that by itself, or collectively with other judgments or
orders previously entered in the action, exceeds the $1,000,000
threshold required for a whistleblower to be potentially eligible for
an award. The CFTC will not contact whistleblower claimants directly as
to Notices of Covered Actions; prospective claimants should monitor the
CFTC Web site for such Notices.
Question 1: Provide the date of the Notice of Covered Action to
which this claim relates.
Question 2: Provide the notice number of the Notice of Covered
Action.
Question 3a: Provide the case name referenced in the Notice of
Covered Action.
Question 3b: Provide the case number referenced in the Notice of
Covered Action.
Section E: Claims Pertaining to Related Actions
Question 1: Provide the name of the agency or organization to which
you provided your information.
Question 2: Provide the name and contact information for your point
of contact at the agency or organization, if known.
Question 3a: Provide the date on which you provided your
information to the agency or organization referenced in Question 1 of
this section.
Question 3b: Provide the date on which the agency or organization
referenced in Question 1 of this section filed the related action that
was based upon the information that you provided.
Question 4a: Provide the case name of the related action.
Question 4b: Provide the case number of the related action.
Section F: Eligibility Requirements and Other Information
Question 1: State whether you are currently, or were at the time
that you acquired the original information that you submitted to the
CFTC, a member, officer or employee of: The CFTC; the Board of
Governors of the Federal Reserve System; the Office of the Comptroller
of the Currency; the Board of Directors of the Federal Deposit
Insurance Corporation; the Director of the Office of Thrift
Supervision; the National Credit Union Administration Board; the
Securities and Exchange Commission; the Department of Justice; a
registered entity; a registered futures association; a self-regulatory
organization; a law enforcement organization; or a foreign regulatory
authority or law enforcement organization.
[[Page 24521]]
Question 2: State whether you provided the information that you
submitted to the CFTC pursuant to a cooperation agreement with the
CFTC, or with any other agency or organization.
Question 3: State whether you provided this information before you
(or anyone representing you) received any request, inquiry or demand
that relates to the subject matter of your submission (i) from the
CFTC, (ii) in connection with an investigation, inspection or
examination by any registered entity, registered futures association or
self-regulatory organization, or (iii) in connection with an
investigation by the Congress, or any other federal or state authority.
Question 4: State whether you are currently a subject or target of
a criminal investigation, or whether you have been convicted of a
criminal violation, in connection with the information that you
submitted to the CFTC and upon which your application for an award is
based.
Question 5: State whether you acquired the information that you
provided to the CFTC from any individual described in Questions 1
through 4 of this section.
Question 6: If you answered yes to any of Questions 1 through 5 of
this section, please provide details.
Section G: Entitlement to Award
This section is optional. Use this section to explain the basis for
your belief that you are entitled to an award in connection with your
submission of information to the CFTC, or to another agency in
connection with a related action. Specifically, address why you believe
that you voluntarily provided the CFTC with original information that
led to the successful enforcement of a judicial or administrative
action filed by the CFTC, or a related action. Refer to Sec. 165.9 of
the CFTC's regulations for further information concerning the relevant
award criteria.
Section 23(c)(1)(B) of the Commodity Exchange Act and Sec.
165.9(a) of the CFTC's regulations require the CFTC to consider the
following factors in determining the amount of an award: (1) The
significance of the information provided by a whistleblower to the
success of the CFTC action or related action; (2) the degree of
assistance provided by the whistleblower and any legal representative
of the whistleblower in the CFTC action or related action; (3) the
programmatic interest of the CFTC in deterring violations of the
Commodity Exchange Act (including regulations under the Act) by making
awards to whistleblowers who provide information that leads to the
successful enforcement of such laws; (4) whether the award otherwise
enhances the CFTC's ability to enforce the Commodity Exchange Act,
protect customers, and encourage the submission of high quality
information from whistleblowers; and (5) potential adverse incentives
from oversize awards. Address these factors in your response as well.
Section H: Claimant's Declaration
You must sign this Declaration if you are submitting this claim
pursuant to the CFTC whistleblower program and wish to be considered
for an award. If you are submitting your claim anonymously, you must do
so through an attorney, and you must provide your attorney with your
original signed Form WB-APP.
Section I: Counsel Certification
If you are submitting this claim pursuant to the CFTC whistleblower
program anonymously, you must do so through an attorney, and your
attorney must sign the Counsel Certification Section.
Issued in Washington, DC, on May 22, 2017, by the Commission.
Christopher J. Kirkpatrick,
Secretary of the Commission.
Note: The following appendix will not appear in the Code of
Federal Regulations.
Appendix to Whistleblower Awards Process--Commission Voting Summary
On this matter, Acting Chairman Giancarlo and Commissioner Bowen
voted in the affirmative. No Commissioner voted in the negative.
[FR Doc. 2017-10801 Filed 5-26-17; 8:45 am]
BILLING CODE 6351-01-P