With an “alert” issued June 20, 2023, the Commodity Futures Trading Commission (CFTC) is targeting carbon markets by asking whistleblowers to come forward with information about fraudulent or manipulative trading of carbon credits and other environmental commodities as well as related derivatives.
The CFTC’s whistleblower program is not a new concept. The program offers whistleblowers, even those who are not company “insiders,” between 10% and 30% of the amount of monetary sanctions collected due to the information provided. And the payments can be major: A recent payment was nearly $200 million. This whistleblower alert is unusual because it specifically asks whistleblowers to come forward, a rare move by the CFTC. It also targets a particular sector: environmentally related products.
Carbon Markets
The CFTC has claimed “anti-fraud and anti-manipulation enforcement authority” over trading in “spot markets for carbon credits [and] ... carbon allowances and other environmental commodities products.” The call for whistleblowers is not limited to energy companies. Industry entities that historically have emitted a lot of carbon may trade in these markets and be subject to investigations and subsequent enforcement proceedings. This also may affect commodity trading and brokerage firms involved in these markets.
Additionally, if an entity is involved in voluntary market-based carbon trading programs such as the Regional Greenhouse Gas Initiative (RGGI) or the Western Climate...
Foley partner Lisa Noller, Chair of the Firm’s Litigation Department, will be speaking at the American Bar Association’s Qui Tam & Civil False Claims and Healthcare Fraud Institute in Washingt...