Deutsche Bank whistleblower paid $200m reward

Deutsche Bank HQ in Frankfurt

The Commodity Futures Trading Commission (CFTC) announced an award of nearly $200 million to a whistleblower whose information “significantly contributed to an already open investigation and led to a successful enforcement action, as well as to the success of two related actions, by a U.S. federal regulator and a foreign regulator.”

The CFTC did not identify the whistleblower or disclose details about the case.

However, The Financial Times and The Wall Street Journal both reported the whistleblower helped regulators investigate manipulation of the Libor interest rate benchmark by Deutsche Bank.

The Financial Times cited “people familiar with the matter” saying the award was related to a $2.5 billion settlement paid by Deutsche Bank after a regulatory investigation into the manipulation of Libor, the disgraced interest rate benchmark rate that was found to have been rigged.

Deutsche Bank declined to comment.

$200 million is the largest-ever payment under US whistleblower programmes.

The CFTC said: “According to the order, the whistleblower’s information led the CFTC to important, direct evidence of wrongdoing.

“In order to qualify for an award, a whistleblower who significantly contributed to the success of an enforcement action must demonstrate that there is a ‘meaningful nexus’ between the information provided and the CFTC’s ability to successfully complete its investigation, and to either obtain a settlement or prevail in a litigated proceeding.

“The Commission determined here that the whistleblower met this standard.

“The whistleblower’s claim in connection with a third related action by a state regulator was denied because the whistleblower’s information was never shared with the state regulator.

“With this award, the CFTC has granted whistleblower awards associated with enforcement actions that have resulted in monetary sanctions totaling more than $3 billion.”

Law firm Kirby McInerney in a statement identified the whistleblower as its client.

The firm said: “The law firm of Kirby McInerney LLP announces that its whistleblower client has been awarded nearly $200 million by the whistleblower program of the Commodity Futures Trading Commission (CFTC).

“Today’s CFTC whistleblower award is the largest, publicly-announced single whistleblower award arising under the Dodd-Frank whistleblower reward programs (the CFTC and U.S. Securities and Exchange Commission (SEC)) as well as under other whistleblower programs including the IRS and the federal and state false claims acts.

“Kirby McInerney’s client provided extensive information, documents, and trading information in 2012 that catalyzed investigations by the CFTC, a U.S. federal regulator, and a foreign regulator of manipulation of crucial financial benchmarks used by global banks.

“These benchmarks are references used as the basis for the pricing of fixed income futures, options, swaps and other derivative products traded and cleared on the Chicago Mercantile Exchange (CME) and the Chicago Board of Trade (CBOT).

“The CFTC is the government agency charged with protecting commodities markets and enforcing the Commodity Exchange Act (the CEA) and related regulations.”

David Kovel, Kirby McInerney’s lead partner on the matter, said: “Manipulation of financial benchmarks enriches manipulators at the expense of market participants …

“We are pleased that the CFTC has recognized that the whistleblower deserved a substantial award and Kirby McInerney fought hard to ensure that its client was recognized under the current award system.  Today, we can say the system works.

“The whistleblower laws recognize the fundamental truth that incentivizing persons with knowledge to come forward to report on frauds benefits the public as a whole by disclosing violations that likely would never have been caught.”