The whistleblower office of the Commodity Futures Trading Commission (CFTC) has issued an alert for information concerning violations of The Bank Secrecy Act including: 1) implementing and maintaining a written anti-money laundering program approved by senior management; 2) implementing a written customer identification program; 3) filing suspicious activity reports and 4) filing currency transaction reports.
What types of misconduct should you be on the lookout for?
The CFTC has brought charges under 17 C.F.R. § 166.3 against FCMs and IBs that fail to comply with BSA requirements. Conduct like that in the 1Pool Ltd., In re Morgan Stanley Smith Barney, and In re Rosenthal Collins Group cases is always of concern to the CFTC. Other concerns include:
- Improper supervision and records violations
- Failure to diligently supervise officers’, employees’, and agents’ opening and handling of accounts
- Failure to protect customers and the markets from fraud and corruption
- Improper enforcement of trading limits assigned by regulators
- Inadequate construction of a customer identification program as part of the firm’s compliance program
- Failure to file suspicious activity reports
What can you do if you suspect misconduct?
If you see something suspicious, you can
- Complete a Form TCR Complaint Referral through an attorney correctly and as completely as possible
- Provide details that are specific, credible, and timely
- Include as much information about the violation as possible – e.g., improper supervision, inadequate policies, etc.
- Attach supporting materials to your Form TCR, as long as they are not protected by the attorney‐client privilege or not inconsistent with the requirements of SAR confidentiality
- Supplement your Form TCR filing with any additional information via mail, fax, or email
Note that the Whistleblower Rules define a whistleblower as one or more individuals. A company or another entity cannot meet the definition, but a company “insider” (like an employee or trader), a victim of fraud, or other market participants who observe misconduct may also qualify as whistleblowers.
The CFTC will pay 10%‐30% in monetary awards to eligible persons who voluntarily provide us with original information on a Form TCR about violations of the CEA or its rules, if that information leads to a successful CFTC enforcement action resulting in more than $1 million in monetary sanctions. The program also affords confidentiality and anti‐retaliation protections.
JEFFREY NEWMAN AND HIS FIRM ARE WHISTLEBLOWEER LAWYERS WHO HANDLE CASES UNDER THE CFTC AND SEC WHISTLEBLOWER PROGRAMS AND ALSO HEALTHCARE FRAUD CASES UNDER THE FALSE CLAIMS ACT. HE CAN BE REACHED AT JEFF@JEFFNEWMANLAW.COM OR AT 617-823-3217
