7 U.S.C. § 26 — Commodity whistleblower incentives and

Page 151 TITLE 7—AGRICULTURE § 26 market, licensed board of trade,’’ in introductory pro- visions. Subsec. (a)(1)(C)(i). Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(25)(A)(i)(II)], substituted ‘‘registered entity’’ for ‘‘contract market’’. Subsec. (a)(2). Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(25)(A)(ii)], substituted ‘‘sections 7(d)(13), 7a–1(b)(1)(E),’’ for ‘‘sections 7a(11),’’. Subsec. (a)(3). Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(25)(A)(iii)], substituted ‘‘registered entity’’ for ‘‘contract market’’ in introductory provisions. Subsec. (a)(4). Pub. L. 106–554, § 1(a)(5) [title I, § 120], added par. (4). Subsec. (b)(1). Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(25)(B)(i)], substituted ‘‘registered entity that fails’’ for ‘‘contract market or clearing organization of a contract market that fails’’, ‘‘sections 7 through 7a–2 of this title’’ for ‘‘section 7a(8) and section 7a(9) of this title’’, ‘‘registered entity that in’’ for ‘‘contract mar- ket, clearing organization of a contract market, or li- censed board of trade that in’’, and ‘‘registered entity to the’’ for ‘‘contract market or licensed board of trade to the’’. Subsec. (b)(3). Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(25)(B)(ii)], substituted ‘‘employee of registered entity’’ for ‘‘employee of a contract market, clearing organization, licensed board of trade,’’ and ‘‘such reg- istered entity’’ for ‘‘such contract market, licensed board of trade’’. Subsec. (b)(4). Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(25)(B)(iii)], substituted ‘‘registered entity’’ for ‘‘contract market, licensed board of trade, clearing or- ganization,’’. Subsec. (b)(5). Pub. L. 106–554, § 1(a)(5) [title I, § 123(a)(25)(B)(iv)], substituted ‘‘registered entity’’ for ‘‘contract market, licensed board of trade, clearing or- ganization,’’. 1992—Subsec. (a)(1). Pub. L. 102–546, § 402(14)(A), sub- stituted ‘‘subparagraphs’’ for ‘‘clauses’’ in introductory provisions and ‘‘subparagraph’’ for ‘‘clause’’ in subpar. (D). Subsec. (a)(2). Pub. L. 102–546, § 402(14)(B), made tech- nical amendment to reference to section 21(b)(10) of this title to correct reference to corresponding section of original act. Subsec. (a)(3). Pub. L. 102–546, § 222(d), added par. (3). Subsec. (c). Pub. L. 102–546, § 211, amended subsec. (c) generally. Prior to amendment, subsec. (c) read as fol- lows: ‘‘The United States district courts shall have ex- clusive jurisdiction of actions brought under this sec- tion. Any such action must be brought within two years after the date the cause of action accrued.’’ Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by sections 738(c), 739, and 749(h) of Pub. L. 111–203 effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle A (§§ 711–754) of title VII of Pub. L. 111–203 requires a rule- making, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle A, see section 754 of Pub. L. 111–203, set out as a note under section 1a of this title. Amendment by section 753(c) of Pub. L. 111–203 effec- tive on the date on which the final rule promulgated by the Commodity Futures Trading Commission pursuant to Pub. L. 111–203 takes effect [see 76 F.R. 41398, effec- tive Aug. 15, 2011], see section 753(d) of Pub. L. 111–203, set out as a note under section 9 of this title. EFFECTIVE DATE OF 2008 AMENDMENT Amendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, except as other- wise provided, see section 4 of Pub. L. 110–246, set out as an Effective Date note under section 8701 of this title. Amendment by section 13203(n) of Pub. L. 110–246 ef- fective June 18, 2008, see section 13204(a) of Pub. L. 110–246, set out as a note under section 2 of this title. EFFECTIVE DATE Section effective Jan. 11, 1983, see section 239 of Pub. L. 97–444, set out as an Effective Date of 1983 Amend- ment note under section 2 of this title. § 26. Commodity whistleblower incentives and protection (a) Definitions In this section: (1) Covered judicial or administrative action The term ‘‘covered judicial or administra- tive action’’ means any judicial or administra- tive action brought by the Commission under this chapter that results in monetary sanc- tions exceeding $1,000,000. (2) Fund The term ‘‘Fund’’ means the Commodity Fu- tures Trading Commission Customer Protec- tion Fund established under subsection (g). (3) Monetary sanctions The term ‘‘monetary sanctions’’, when used with respect to any judicial or administrative action means— (A) any monies, including penalties, disgorgement, restitution, and interest or- dered to be paid; and (B) any monies deposited into a disgorgement fund or other fund pursuant to section 7246(b) of title 15, as a result of such action or any settlement of such action. (4) Original information The term ‘‘original information’’ means in- formation that— (A) is derived from the independent knowl- edge or analysis of a whistleblower; (B) is not known to the Commission from any other source, unless the whistleblower is the original source of the information; and (C) is not exclusively derived from an alle- gation made in a judicial or administrative hearing, in a governmental report, hearing, audit, or investigation, or from the news media, unless the whistleblower is a source of the information. (5) Related action The term ‘‘related action’’, when used with respect to any judicial or administrative ac- tion brought by the Commission under this chapter, means any judicial or administrative action brought by an entity described in sub- clauses (I) through (VI) of subsection (h)(2)(C) that is based upon the original information provided by a whistleblower pursuant to sub- section (a) that led to the successful enforce- ment of the Commission action. (6) Successful resolution The term ‘‘successful resolution’’, when used with respect to any judicial or administrative action brought by the Commission under this chapter, includes any settlement of such ac- tion. (7) Whistleblower The term ‘‘whistleblower’’ means any indi- vidual, or 2 or more individuals acting jointly, who provides information relating to a viola- tion of this chapter to the Commission, in a Page 152 TITLE 7—AGRICULTURE § 26 1 So in original. Probably should be ‘‘this’’. 2 So in original. Probably should be ‘‘section 706’’. manner established by rule or regulation by the Commission. (b) Awards (1) In general In any covered judicial or administrative ac- tion, or related action, the Commission, under regulations prescribed by the Commission and subject to subsection (c), shall pay an award or awards to 1 or more whistleblowers who volun- tarily provided original information to the Commission that led to the successful enforce- ment of the covered judicial or administrative action, or related action, in an aggregate amount equal to— (A) not less than 10 percent, in total, of what has been collected of the monetary sanctions imposed in the action or related actions; and (B) not more than 30 percent, in total, of what has been collected of the monetary sanctions imposed in the action or related actions. (2) Payment of awards Any amount paid under paragraph (1) shall be paid from the Fund. (c) Determination of amount of award; denial of award (1) Determination of amount of award (A) Discretion The determination of the amount of an award made under subsection (b) shall be in the discretion of the Commission. (B) Criteria In determining the amount of an award made under subsection (b), the Commis- sion— (i) shall take into consideration— (I) the significance of the information provided by the whistleblower to the suc- cess of the covered judicial or adminis- trative action; (II) the degree of assistance provided by the whistleblower and any legal rep- resentative of the whistleblower in a covered judicial or administrative ac- tion; (III) the programmatic interest of the Commission in deterring violations of the 1 chapter (including regulations under the 1 chapter) by making awards to whistleblowers who provide information that leads to the successful enforcement of such laws; and (IV) such additional relevant factors as the Commission may establish by rule or regulation; and (ii) shall not take into consideration the balance of the Fund. (2) Denial of award No award under subsection (b) shall be made— (A) to any whistleblower who is, or was at the time the whistleblower acquired the original information submitted to the Com- mission, a member, officer, or employee of— (i) a appropriate regulatory agency; (ii) the Department of Justice; (iii) a registered entity; (iv) a registered futures association; (v) a self-regulatory organization as de- fined in section 78c(a) of title 15; or (vi) a law enforcement organization; (B) to any whistleblower who is convicted of a criminal violation related to the judi- cial or administrative action for which the whistleblower otherwise could receive an award under this section; (C) to any whistleblower who submits in- formation to the Commission that is based on the facts underlying the covered action submitted previously by another whistle- blower; (D) to any whistleblower who fails to sub- mit information to the Commission in such form as the Commission may, by rule or reg- ulation, require. (d) Representation (1) Permitted representation Any whistleblower who makes a claim for an award under subsection (b) may be represented by counsel. (2) Required representation (A) In general Any whistleblower who anonymously makes a claim for an award under sub- section (b) shall be represented by counsel if the whistleblower submits the information upon which the claim is based. (B) Disclosure of identity Prior to the payment of an award, a whis- tleblower shall disclose the identity of the whistleblower and provide such other infor- mation as the Commission may require, di- rectly or through counsel for the whistle- blower. (e) No contract necessary No contract with the Commission is necessary for any whistleblower to receive an award under subsection (b), unless otherwise required by the Commission, by rule or regulation. (f) Appeals (1) In general Any determination made under this section, including whether, to whom, or in what amount to make awards, shall be in the discre- tion of the Commission. (2) Appeals Any determination described in paragraph (1) may be appealed to the appropriate court of appeals of the United States not more than 30 days after the determination is issued by the Commission. (3) Review The court shall review the determination made by the Commission in accordance with section 7064 2 of title 5. Page 153 TITLE 7—AGRICULTURE § 26 (g) Commodity Futures Trading Commission Customer Protection Fund (1) Establishment There is established in the Treasury of the United States a revolving fund to be known as the ‘‘Commodity Futures Trading Commission Customer Protection Fund’’. (2) Use of Fund The Fund shall be available to the Commis- sion, without further appropriation or fiscal year limitation, for— (A) the payment of awards to whistle- blowers as provided in subsection (a); and (B) the funding of customer education ini- tiatives designed to help customers protect themselves against fraud or other violations of this chapter, or the rules and regulations thereunder. (3) Deposits and credits There shall be deposited into or credited to the Fund: (A) Monetary sanctions Any monetary sanctions collected by the Commission in any covered judicial or ad- ministrative action that is not otherwise distributed to victims of a violation of this chapter or the rules and regulations there- under underlying such action, unless the bal- ance of the Fund at the time the monetary judgment is collected exceeds $100,000,000. (B) Additional amounts If the amounts deposited into or credited to the Fund under subparagraph (A) are not sufficient to satisfy an award made under subsection (b), there shall be deposited into or credited to the Fund an amount equal to the unsatisfied portion of the award from any monetary sanction collected by the Commission in any judicial or administra- tive action brought by the Commission under this chapter that is based on informa- tion provided by a whistleblower. (C) Investment income All income from investments made under paragraph (4). (4) Investments (A) Amounts in Fund may be invested The Commission may request the Sec- retary of the Treasury to invest the portion of the Fund that is not, in the Commission’s judgment, required to meet the current needs of the Fund. (B) Eligible investments Investments shall be made by the Sec- retary of the Treasury in obligations of the United States or obligations that are guar- anteed as to principal and interest by the United States, with maturities suitable to the needs of the Fund as determined by the Commission. (C) Interest and proceeds credited The interest on, and the proceeds from the sale or redemption of, any obligations held in the Fund shall be credited to, and form a part of, the Fund. (5) Reports to Congress Not later than October 30 of each year, the Commission shall transmit to the Committee on Agriculture, Nutrition, and Forestry of the Senate, and the Committee on Agriculture of the House of Representatives a report on— (A) the Commission’s whistleblower award program under this section, including a de- scription of the number of awards granted and the types of cases in which awards were granted during the preceding fiscal year; (B) customer education initiatives de- scribed in paragraph (2)(B) that were funded by the Fund during the preceding fiscal year; (C) the balance of the Fund at the begin- ning of the preceding fiscal year; (D) the amounts deposited into or credited to the Fund during the preceding fiscal year; (E) the amount of earnings on investments of amounts in the Fund during the preceding fiscal year; (F) the amount paid from the Fund during the preceding fiscal year to whistleblowers pursuant to subsection (b); (G) the amount paid from the Fund during the preceding fiscal year for customer edu- cation initiatives described in paragraph (2)(B); (H) the balance of the Fund at the end of the preceding fiscal year; and (I) a complete set of audited financial statements, including a balance sheet, in- come statement, and cash flow analysis. (h) Protection of whistleblowers (1) Prohibition against retaliation (A) In general No employer may discharge, demote, sus- pend, threaten, harass, directly or indi- rectly, or in any other manner discriminate against, a whistleblower in the terms and conditions of employment because of any lawful act done by the whistleblower— (i) in providing information to the Com- mission in accordance with subsection (b); or (ii) in assisting in any investigation or judicial or administrative action of the Commission based upon or related to such information. (B) Enforcement (i) Cause of action An individual who alleges discharge or other discrimination in violation of sub- paragraph (A) may bring an action under this subsection in the appropriate district court of the United States for the relief provided in subparagraph (C), unless the individual who is alleging discharge or other discrimination in violation of sub- paragraph (A) is an employee of the Fed- eral Government, in which case the indi- vidual shall only bring an action under section 1221 of title 5. (ii) Subpoenas A subpoena requiring the attendance of a witness at a trial or hearing conducted under this subsection may be served at any place in the United States. Page 154 TITLE 7—AGRICULTURE § 26 (iii) Statute of limitations An action under this subsection may not be brought more than 2 years after the date on which the violation reported in subparagraph (A) is committed. (C) Relief Relief for an individual prevailing in an action brought under subparagraph (B) shall include— (i) reinstatement with the same senior- ity status that the individual would have had, but for the discrimination; (ii) the amount of back pay otherwise owed to the individual, with interest; and (iii) compensation for any special dam- ages sustained as a result of the discharge or discrimination, including litigation costs, expert witness fees, and reasonable attorney’s fees. (2) Confidentiality (A) In general Except as provided in subparagraphs (B) and (C), the Commission, and any officer or employee of the Commission, shall not dis- close any information, including informa- tion provided by a whistleblower to the Commission, which could reasonably be ex- pected to reveal the identity of a whistle- blower, except in accordance with the provi- sions of section 552a of title 5, unless and until required to be disclosed to a defendant or respondent in connection with a public proceeding instituted by the Commission or any entity described in subparagraph (C). For purposes of section 552 of title 5, this paragraph shall be considered a statute de- scribed in subsection (b)(3)(B) of such section 552. (B) Effect Nothing in this paragraph is intended to limit the ability of the Attorney General to present such evidence to a grand jury or to share such evidence with potential witnesses or defendants in the course of an ongoing criminal investigation. (C) Availability to government agencies (i) In general Without the loss of its status as con- fidential in the hands of the Commission, all information referred to in subpara- graph (A) may, in the discretion of the Commission, when determined by the Commission to be necessary or appropriate to accomplish the purposes of this chapter and protect customers and in accordance with clause (ii), be made available to— (I) the Department of Justice; (II) an appropriate department or agency of the Federal Government, act- ing within the scope of its jurisdiction; (III) a registered entity, registered fu- tures association, or self-regulatory or- ganization as defined in section 78c(a) of title 15; (IV) a State attorney general in con- nection with any criminal investigation; (V) an appropriate department or agen- cy of any State, acting within the scope of its jurisdiction; and (VI) a foreign futures authority. (ii) Maintenance of information Each of the entities, agencies, or persons described in clause (i) shall maintain infor- mation described in that clause as con- fidential, in accordance with the require- ments in subparagraph (A). (iii) Study on impact of FOIA exemption on Commodity Futures Trading Commis- sion (I) Study The Inspector General of the Commis- sion shall conduct a study— (aa) on whether the exemption under section 552(b)(3) of title 5 (known as the Freedom of Information Act) es- tablished in paragraph (2)(A) aids whis- tleblowers in disclosing information to the Commission; (bb) on what impact the exemption has had on the public’s ability to ac- cess information about the Commis- sion’s regulation of commodity futures and option markets; and (cc) to make any recommendations on whether the Commission should continue to use the exemption. (II) Report Not later than 30 months after July 21, 2010, the Inspector General shall— (aa) submit a report on the findings of the study required under this clause to the Committee on Banking, Hous- ing, and Urban Affairs of the Senate and the Committee on Financial Serv- ices of the House of Representatives; and (bb) make the report available to the public through publication of a report on the website of the Commission. (3) Rights retained Nothing in this section shall be deemed to diminish the rights, privileges, or remedies of any whistleblower under any Federal or State law, or under any collective bargaining agree- ment. (i) Rulemaking authority The Commission shall have the authority to issue such rules and regulations as may be nec- essary or appropriate to implement the provi- sions of this section consistent with the pur- poses of this section. (j) Implementing rules The Commission shall issue final rules or reg- ulations implementing the provisions of this section not later than 270 days after July 21, 2010. (k) Original information Information submitted to the Commission by a whistleblower in accordance with rules or reg- ulations implementing this section shall not lose its status as original information solely be- cause the whistleblower submitted such infor- mation prior to the effective date of such rules or regulations, provided such information was submitted after July 21, 2010. Page 155 TITLE 7—AGRICULTURE § 27 1 So in original. Probably should be ‘‘paragraphs’’. (l) Awards A whistleblower may receive an award pursu- ant to this section regardless of whether any violation of a provision of this chapter, or a rule or regulation thereunder, underlying the judi- cial or administrative action upon which the award is based occurred prior to July 21, 2010. (m) Provision of false information A whistleblower who knowingly and willfully makes any false, fictitious, or fraudulent state- ment or representation, or who makes or uses any false writing or document knowing the same to contain any false, fictitious, or fraudu- lent statement or entry, shall not be entitled to an award under this section and shall be subject to prosecution under section 1001 of title 18. (n) Nonenforceability of certain provisions waiving rights and remedies or requiring ar- bitration of disputes (1) Waiver of rights and remedies The rights and remedies provided for in this section may not be waived by any agreement, policy form, or condition of employment in- cluding by a predispute arbitration agreement. (2) Predispute arbitration agreements No predispute arbitration agreement shall be valid or enforceable, if the agreement re- quires arbitration of a dispute arising under this section. (Sept. 21, 1922, ch. 369, § 23, as added Pub. L. 111–203, title VII, § 748, July 21, 2010, 124 Stat. 1739.) Editorial Notes PRIOR PROVISIONS A prior section 26, act Sept. 21, 1922, ch. 369, § 23, as added Jan. 11, 1983, Pub. L. 97–444, title II, § 236, 96 Stat. 2324, provided for special studies to be conducted by Commission, Board of Governors of Federal Reserve System, and Securities and Exchange Commission, prior to repeal by Pub. L. 102–546, title IV, § 402(15), Oct. 28, 1992, 106 Stat. 3625. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle A (§§ 711–754) of title VII of Pub. L. 111–203 requires a rule- making, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle A, see section 754 of Pub. L. 111–203, set out as an Effective Date of 2010 Amendment note under sec- tion 1a of this title. § 27. Definitions (a) Bank In sections 27 to 27f of this title, the term ‘‘bank’’ means— (1) any depository institution (as defined in section 1813(c) of title 12); (2) any foreign bank or branch or agency of a foreign bank (each as defined in section 3101 of title 12); (3) any Federal or State credit union (as de- fined in section 1752 of title 12); (4) any corporation organized under section 25A of the Federal Reserve Act [12 U.S.C. 611 et seq.]; (5) any corporation operating under section 25 of the Federal Reserve Act [12 U.S.C. 601 et seq.]; (6) any trust company; or (7) any subsidiary of any entity described in paragraph 1 (1) through (6) of this subsection, if the subsidiary is regulated as if the subsidiary were part of the entity and is not a broker or dealer (as such terms are defined in section 78c of title 15) or a futures commission merchant (as defined in section 1a of this title). (b) Identified banking product In sections 27 to 27f of this title, the term ‘‘identified banking product’’ shall have the same meaning as in paragraphs (1) through (5) of section 206(a) of the Gramm-Leach-Bliley Act, except that in applying such section for pur- poses of sections 27 to 27f of this title— (1) the term ‘‘bank’’ shall have the meaning given in subsection (a) of this section; and (2) the term ‘‘qualified investor’’ means eli- gible contract participant (as defined in sec- tion 1a of this title, as in effect on December 21, 2000). (c) Hybrid instrument In sections 27 to 27f of this title, the term ‘‘hy- brid instrument’’ means an identified banking product not excluded by section 27a of this title, offered by a bank, having one or more payments indexed to the value, level, or rate of, or pro- viding for the delivery of, one or more commod- ities (as defined in section 1a of this title). (Pub. L. 106–554, § 1(a)(5) [title IV, § 402], Dec. 21, 2000, 114 Stat. 2763, 2763A–457; Pub. L. 111–203, title VII, §§ 721(e)(9), 725(g)(1)(B), July 21, 2010, 124 Stat. 1672, 1694.) Editorial Notes REFERENCES IN TEXT Section 25A of the Federal Reserve Act, referred to in subsec. (a)(4), is classified to subchapter II (§ 611 et seq.) of chapter 6 of Title 12, Banks and Banking. Section 25 of the Federal Reserve Act, referred to in subsec. (a)(5), is classified to subchapter I (§ 601 et seq.) of chapter 6 of Title 12. Section 206 of the Gramm-Leach-Bliley Act, referred to in subsec. (b), is section 206 of Pub. L. 106–102 which is set out as a note under section 78c of Title 15, Com- merce and Trade. CODIFICATION Section was enacted as part of the Legal Certainty for Bank Products Act of 2000, and also as part of the Commodity Futures Modernization Act of 2000, and not as part of the Commodity Exchange Act which com- prises this chapter. AMENDMENTS 2010—Subsec. (a)(7). Pub. L. 111–203, § 721(e)(9)(A), sub- stituted ‘‘section 1a’’ for ‘‘section 1a(20)’’. Subsec. (b)(2). Pub. L. 111–203, § 721(e)(9)(B), sub- stituted ‘‘section 1a’’ for ‘‘section 1a(12)’’. Subsec. (c). Pub. L. 111–203, § 721(e)(9)(C), substituted ‘‘section 1a’’ for ‘‘section 1a(4)’’. Subsec. (d). Pub. L. 111–203, § 725(g)(1)(B), struck out subsec. (d) which defined covered swap agreement. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111–203 effective on the later of 360 days after July 21, 2010, or, to the extent a provi-