The CFTC may deplete its entire pool of whistleblower rewards on one former Deutsche Bank executive, report says

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The Commodity Futures Trading Commission may soon find the funds for its Whistleblower Program depleted, thanks to a potential payout exceeding $100 million, The Wall Street Journal reported this week.

The hefty sum, which might even force the commission to seek congressional action, will be used to reward a former Deutsche Bank executive, The Wall Street Journal said.

The said executive provided information that helped investigations into Libor rigging, which led to around $2.5 billion in settlements with Deutsche Bank in 2015, including an $800 million settlement with the CFTC.

The Justice Department and the commission alleged that the German Bank manipulated the London interbank offered rate, or Libor, a series of benchmark rates used by lenders to determine other short-term interest rates, The Wall Street Journal reported.

Deutsche Bank pleaded guilty to US criminal charges. 

The Whistleblower Program aims to provide a monetary incentive to individuals who can report violations of the Commodity Exchange Act, which regulates the trading of commodity futures in the US.

Since issuing its first award in 2014, the program has awarded around $123 million to whistleblowers, according to the official website.

The Securities and Exchange Commission said whistleblowers under the program are entitled to a reward of 10%-30% of the monetary sanctions collected by the regulator.

Still, there are concerns over the mechanism to pay the Deutsche Bank executive due to inadequate funding, The Wall Street Journal reported.

To pay whistleblowers, the CFTC collects money from its enforcement penalties.

However, the fund can only be replenished when it drops below $100 million. And after a large payout, it would prove to be difficult to replenish the fund as many of the agency's penalties are $5 million or less, sources told WSJ.



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