How to Report CFTC Fraud: The Trade, the Money and Who Directed It

A CFTC fraud evidence checklist connects what you saw to the trades, transfers or instructions behind it. To decide how to report CFTC fraud, start with our whistleblower experts and that account of the conduct. You may know why an order vanished, who approved a customer-fund transfer or which message never reached the recorded system. We help turn that knowledge into a case built around the conduct and the people directing it.

CFTC Fraud Evidence Checklist

The checklist connects the business, the transaction, the decision and the supporting record. The CFTC Whistleblower Program seeks original information that helps produce successful enforcement. The Commodity Futures Trading Commission’s insider-trading alert asks for specific, credible and timely details, including transaction and identifying information.

We begin with what you personally saw and how you know it. A conversation you heard, an instruction you received and a pattern you inferred from trading data give us different starting points. The company, desk, account, product and sequence help connect your account to the records. You can speak with us while parts of that picture are still missing.

These records answer different parts of the same story. We work through the connections with you, including which records you know exist elsewhere and what your own role lets you explain.

The Chronology Behind the Records

A trading account gains meaning when the instructions, transactions and responses appear in sequence. We distinguish what you saw at the time from what you learned afterward, and firsthand knowledge from an inference or something a colleague told you. That lets us identify the record that supports each part of your account.

Time and location can connect desks working on the same transaction. The swaps-trader complaint discussed below describes trading from Tokyo that affected a U.S. pricing screen used for a separate customer transaction. The pricing call, the screen movement and the messages about that transaction belonged to the same sequence. We examine the timing in that business context.

Earlier reports and the response to them also belong in our review. An internal concern, a surveillance alert and a later instruction can show what reached a supervisor and what happened next. We discuss the records you already hold and the systems or people you know may hold the rest.

What Trading Records Support a CFTC Tip?

Trading records support a CFTC tip when they connect the order sequence to the account, instruction or position that benefited. An order history shows submissions and cancellations. Fills show what actually traded. Code and communications can explain why those events occurred in that order. The CFTC’s alert specifically identifies Tag 50s among the identifying details that can help a report.

For CFTC TCR order audit trail attachments, the useful story runs from entry through changes, execution and cancellation. We examine the opposing orders, account identifiers and relevant messages together. A trader may recognize the strategy, a developer may understand the programmed response, and a surveillance employee may know what happened after an alert. The sequence connects their different views of the same trading.

How to Report Spoofing at a Futures Trading Firm

To discuss how to report spoofing at a futures trading firm, we begin with the orders the desk wanted filled and the orders it intended to cancel. In its settled action against Panther Energy Trading, the CFTC alleged that an algorithm placed a small order on one side and larger orders on the other to create apparent market interest. After the small order filled, the larger orders disappeared and the program could reverse the pattern.

The order required Panther and its operator to pay a $1.4 million civil penalty and return the same amount in trading profits. We look at what the code was designed to do, which orders benefited and how the cancellations fit that design.

A 2016 article in Futures and Derivatives Law Report, The Exercise of Anti-Spoofing Authority in U.S. Futures Markets: Policy and Compliance Consequences, describes market participants examining order flow to detect suspected spoofing against their own trading. It explains that public data can reveal suspicious activity while the exchange holds the information identifying the firms behind it. An outside trader’s analysis and an employee’s account of the strategy can therefore illuminate different parts of the conduct.

The Price Moves in One Place, the Benefit Lands in Another

Benchmark evidence connects the price supplied or traded to the contract that uses it. Funding inputs, submission instructions and derivatives positions can explain why a desk wanted a particular rate. In its settled action against Barclays, the CFTC alleged both rate submissions intended to benefit trading positions and management-directed submissions intended to conceal funding stress. The order required a $200 million civil penalty. The instruction behind a submission matters alongside the submitted number.

Physical commodity trading adds another connection. EBOB gasoline trades feed a published benchmark used to price linked futures. A physical sale can therefore affect the value of a separate financial position, and someone working across those books may understand a trade that looks peculiar from either desk alone.

In the settlement order, the CFTC alleged that TOTSA TotalEnergies Trading sold gasoline below prices buyers indicated they would pay while holding short futures positions that would benefit from a lower benchmark. The order required a $48 million civil penalty for the alleged attempt to improve the combined trading result by accepting less on the gasoline. We see the absurdity: a buyer offering more stood in the way of the plan. We examine the buyer’s offer, the executed price and the linked futures exposure with the person who could see both books.

Inventory can also be the story behind a claimed hedge. Purchase records, physical counts, invoices and hedge-exemption submissions show what goods the business said it owned and what exposure it claimed to offset. In Easterday Ranches‘s settled civil case, the CFTC described allegations of false cattle invoices and false inventory information supporting hedge exemptions. The company was ordered to pay a combined $263 million in civil restitution and penalties. An operations employee who knows what was actually purchased can connect the physical business to the futures position.

The Customer Balance and the Money Behind It

Customer-fund evidence connects the account statement to the bank balance, transfer and authorization. A futures commission merchant handles customer collateral as part of its trading business. That makes the records of customer obligations, actual cash and transfers central to understanding where customer money went.

The CFTC’s civil company order against MF Global Inc. addressed allegations that customer money financed proprietary operations, affiliates and other obligations during a liquidity crisis. The order required $1.212 billion in civil restitution and a $100 million civil penalty. We examine the transfer instructions beside the customer-fund calculations and destination accounts.

Who supplied the bank confirmation and who could check the balance independently matter alongside the printed figure. The person who approved a transfer and the person who reconciled it may explain different parts of the same movement.

For commodity pools, investor statements and actual trading accounts let us examine claimed performance alongside withdrawals and transfers. We want to understand how the reported return connects to what the pool actually did with the money.

Crypto custody evidence follows the same question through wallets, internal balances and account permissions. A customer-facing promise of safekeeping may sit beside an affiliate’s ability to use the assets. Wallet and bank flows, withdrawal controls and special account permissions help explain that difference. The employee who knows why an exception existed may supply the connection a customer could never see.

The Sales Pitch and the Platform’s Controls

Retail trading evidence connects what the customer was told to how the platform handled the account. Financing terms, metal allocations, storage arrangements and delivery control matter in financed precious-metals transactions. Sales scripts, account settings and withdrawal decisions matter where a platform’s staff control the customer’s trading experience.

In its settled action, the CFTC alleged that FXCM advertised execution without a conflict of interest while an undisclosed, closely connected market maker traded against customers and shared profits with the company. The order described approximately $77 million in payments to FXCM from the market maker and imposed a shared $7 million civil penalty on FXCM, its holding company and the executives. We see a conflict-free sales pitch with a very profitable conflict behind it. The insider who knows the arrangement can connect the customer’s order to the company’s revenue.

For binary options, sales identities, promised returns, settings that limit wins and withdrawal restrictions can connect the sales desk to platform control. In relationship-based trading fraud, messages and purported trading screens show the pitch while deposit destinations show where the money went.

Onboarding records, customer-location information and special access instructions answer a further question: who the platform admitted to trade and who authorized the exception. A compliance employee may know who approved the access while a payments employee can explain where the deposits went.

Confidential Trading Communications in a CFTC Report

Confidential trading communications in a CFTC report can connect access to information with the trade that followed. The Commission’s insider-trading alert identifies misuse of customer orders and employer information among the conduct it seeks. Access permissions, the duty attached to the information, account control and execution timing help explain who could use it and who benefited.

The message’s channel can also be part of the conduct. In a civil complaint against a swaps trader, the CFTC alleged that the trader directed a colleague to keep discussion of a client transaction on WhatsApp:

The complaint also alleged that the trader deleted WhatsApp after receiving a preservation request and encouraged colleagues to delete their accounts. The allegations connect the client transaction, the instruction to move the conversation and the later deletion. We examine missing trading records in that business context, including what supervisors knew and which transaction the messages concerned.

In its settled action against Trafigura Trading, the CFTC alleged that employment and separation agreements impeded voluntary employee communications with the Commission. The order required a $55 million civil penalty covering trading misconduct and these agreements. If an agreement is part of your concern about speaking up, we work through it with you and your CFTC whistleblower counsel.

How Do You Report Market Manipulation?

Speak with our whistleblower experts about the conduct, the records you already hold and the people or systems that connect them. We assess your account and bring in CFTC whistleblower lawyers with experience in the trading practice involved. You can begin by describing what you know and where further records may be held. Questions about confidential material or your own participation belong in that conversation with us.

If you are considering a CFTC TCR without a whistleblower lawyer, start with our whistleblower experts. We work through the evidence, your role and any earlier reporting with you and the appropriate CFTC whistleblower counsel. If anonymity is part of that decision, we work through it with you too.

Does Reporting to a Law Firm File a CFTC Complaint?

Reporting to a law firm does not itself file a CFTC complaint. A request for review through WJN begins a conversation with our team. The Commission receives whistleblower information through Form TCR. We help develop the matter with you and your CFTC whistleblower counsel before that separate submission.

Form TCR and the Information Behind It

Form TCR is the Commission’s tip, complaint or referral form. Its published guidance says information can open a new investigation, reopen a closed one, take an existing investigation in a new direction or contribute significantly to successful enforcement. We focus on what your account adds, including any earlier reporting we need to examine with you.

What Can a CFTC Whistleblower Receive?

The Commission’s award guidance provides for awards totaling 10% to 30% of monetary sanctions collected in a qualifying CFTC action or a related action. A qualifying CFTC action must result in more than $1 million in monetary sanctions. The program rewards voluntary, original information that leads to successful enforcement, including a significant contribution to an existing investigation. We work with you and your CFTC whistleblower counsel on the reporting history, the contribution your evidence makes and the award process.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. The CFTC program uses its own award rules for information supplied to the Commission. We assess the program that fits the conduct you know.

Put Your Knowledge to Work With Us

If you can explain the trade, the transfer or the instruction behind it, speak to one of our Whistleblower Experts. Our whistleblower experts build the strategy around what you know and bring in CFTC whistleblower lawyers who understand the market and the evidence. We stay beside you as the matter develops, from the first account of the conduct through the pursuit of your whistleblower award.