In the first of its kind enforcement action, the Commodity Futures Trading Commission (CFTC or Commission) charged a firm for impeding reporting by a whistleblower in violation of Commission regulations. The CFTC announced a settled administrative proceeding against Trafigura Trading LLC (Trafigura), a Houston, Texas affiliate of a multinational commodity trading firm. According to the order, the firm asked employees and former employees to sign non-disclosure agreements that did not have appropriate language that allowed for government reporting. As part of the US$55 million fine, the Commission found Trafigura also engaged in insider trading and market manipulation.

This CFTC action may signal a shift in the CFTC’s approach to whistleblower protection and other violations that closely mirror the approach of the U.S. Securities and Exchange Commission (SEC).

CFTC Findings Against Trafigura

Impeding Reporting

Regulation 165.19, promulgated under the Commodity Exchange Act (CEA) Section 23(h)-(j), makes it unlawful to

… take any action to impede an individual from communicating directly with the Commission’s staff about a possible violation of the Commodity Exchange Act, including by enforcing, or threatening to enforce, a confidentiality agreement or pre-dispute arbitration agreement with respect to such communications.

According to the order, from 2017 to 2020, Trafigura required its employees and former employees to sign agreements with non-disclosure provisions that...

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