Deutsche Bank whistleblower paid $ 200 million in record reward – .

Deutsche Bank whistleblower paid $ 200 million in record reward – .

The Commodity Futures Trading Commission awarded nearly $ 200 million to a former Deutsche Bank employee who raised concerns over the manipulation of the benchmark interest rate Libor, marking the largest payout never done under US whistleblower programs.

The US derivatives regulator said payment was made for “timely original information” which significantly contributed to an “already open investigation.”

This led to “successful enforcement action, as well as the success of two related actions, by a US federal regulator and a foreign regulator,” the CFTC said in a statement. The agency did not identify the whistleblower, his employer or the associated regulatory action.

But people familiar with the matter said the price was tied to a $ 2.5 billion settlement paid by Deutsche Bank after a regulatory probe into the manipulation of Libor, the disgraced interest rate benchmark that under- tends global finance that turned out to have been rigged by bankers a decade ago. and that will start to fade next year.

Barclays, Deutsche Bank and Société Générale were among the banks that reached agreements with the CFTC and other agencies about the scandal.

In a statement, law firm Kirby McInerney identified the whistleblower as its client, who “provided extensive information, documents and business information in 2012” that sparked CFTC investigations as well as a US and foreign regulator on “manipulation of critical financial information”. benchmarks used by global banks ”.

“The manipulation of financial benchmarks enriches manipulators at the expense of market participants,” said David Kovel, Managing Partner at Kirby McInerney.

The $ 200 million payout is the largest under the Dodd-Frank Act whistleblower program – which includes the CFTC and the Securities and Exchange Commission – along with other programs including the Internal Revenue Service , according to Kirby McInerney.

“This is historic,” said Erika Kelton, whistleblower at Phillips & Cohen. “I don’t know of any other award in any of the US whistleblower programs that is as important as this one. ”

Since issuing its first award in 2014, the CFTC has awarded more than $ 300 million to whistleblowers, who are eligible to receive between 10% and 30% of the monetary penalties collected.

But the latest award has already sparked controversy, with CFTC commissioner Dawn Stump saying she had not approved part of the payment that is “attributable to the collection of sanctions by the foreign regulator” – the first times for the CFTC.

Stump said the agency should be “particularly careful” of awards based on penalties levied by foreign authorities because they embezzle funds that would otherwise be available to US regulators or the US Treasury.

“It’s a price that is obvious,” said Paul Pantano, senior legal counsel at Willkie Farr & Gallagher, adding that the resulting drop in funds available for whistleblowers reporting activity in US markets was “concerning.”

A spokesperson for Deutsche Bank declined to comment.


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