News

person-6

CFTC issues whistleblower alert on insider trading and the misuse of confidential information - 18 June 2019

The CFTC has provided specific direction for reporting improper use of material nonpublic information. They are offering financial awards and protections to members of the public who report any misconduct with the information. The CFTC has defined improper use of material nonpublic information as 1) trading on the basis of material nonpublic information when it breaches any past agreements or 2) trading on the basis of material nonpublic information that has been obtained through fraud or deception. The alert specifies six particular types of misconduct to look out for:

  1. Trading on market moving information that the source had a duty to protect
  2. Brokers front running customer orders or taking the other side of any customer order without consent
  3. Tipping or trading using material nonpublic information obtained by virtue of employment
  4. Trading on material nonpublic information that was obtained by fraud or deception
  5. Futures commission merchants or brokers improperly disclosing customer orders or other material nonpublic information
  6. Swap dealers or major swap participants improperly disclosing material nonpublic information or using material nonpublic information provided by a counterparty without the counterparty’s consent

The CFTC emphasizes that anyone can report improper use, one just has to fill out a Form TCR. A specific, credible report will receive monetary reward.

For more information visit http://business.cch.com/srd/InsiderTradingWBOAlert.pdf .