Category Archives: Commodity Futures Trading Commission (CFTC)

Perspectives on Enforcement: Self-Reporting and Cooperation at the CFTC

by James McDonald

September 25, 2017 – 6:00 p.m.
NYU School of Law: Program on Corporate Compliance & Enforcement /
Institute for Corporate Governance & Finance
As Prepared for Delivery

Thank you for that introduction.  I’m happy to be here with you all today.  I want to talk today about some of our priorities for the CFTC’s Division of Enforcement, and in particular about our cooperation and self-reporting program.  In just a minute, I’ll talk in some detail about this program.  But to frame that discussion, I want to start by talking more generally about our mission in the CFTC and the Division of Enforcement, and some of our priorities going forward.  As I get started, please keep in mind that these are my own views and not necessarily those of the Commission or its staff.

CFTC Mission and Division of Enforcement

At the CFTC, our mission is to foster open, transparent, competitive and financially sound markets.  A vigorous enforcement program is essential to fulfilling this mission.  As Chairman Giancarlo has made clear, under his leadership, there will be no pause, no let up, and no relaxation in the CFTC’s efforts to enforce the law and punish wrongdoing.[1] Continue reading

CFTC Non-Pros Agreements with Citibank Traders Reflects Implementation of New Cooperation Advisories

by Aitan Goelman

On January 19, 2017, the CFTC Enforcement Division issued new advisories outlining the factors that the Division would consider in evaluating cooperation by individuals and companies.  Intended to underscore the high value the Division placed on cooperation, these advisories were issued on the same day that the Commission announced a $25 million fine against Citigroup Global Markets, Inc., (“Citi”) for violating the CEA’s anti-spoofing provisions.  The accompanying Order included a discussion of Citi’s cooperation and its impact on the terms of the settlement.  On March 30, 2017, the Commission announced settlements with two former Citi traders, including the former desk head, for the same misconduct.  These settlements included significant fines and market bans. Continue reading

CFTC Releases New Enforcement Cooperation Guidelines

by Richard D. Owens and Douglas K. Yatter

On January 19, 2017, the Division of Enforcement (Division) of the U.S. Commodity Futures Trading Commission (CFTC or Commission) issued two Enforcement Advisories outlining its approach for evaluating cooperation by corporations and individuals in the agency’s investigations and enforcement actions. The Division investigates and prosecutes alleged violations of the Commodity Exchange Act and Commission regulations involving registered firms and other market participants across the financial, energy, and agricultural sectors as well as other commodities markets. The new Enforcement Advisories are the first update to the CFTC’s corporate cooperation guidelines since 2007 and the Division’s first statement of its policy for cooperating individuals. This article highlights how the CFTC’s new cooperation guidelines address certain important issues in the continually evolving landscape for engaging with civil and criminal enforcement authorities. Continue reading

Four Important Dodd-Frank Whistleblower Program Developments to Watch for in 2017

by Erika A. Kelton

2016 was a banner year for the Dodd-Frank Act’s most significant anti-fraud enforcement provisions: the whistleblower programs at the Securities and Exchange Commission and the Commodity Futures Trading Commission.

In the five years since these programs were established, whistleblowers have rapidly changed the global securities and commodities compliance landscape. The success of the Dodd-Frank whistleblower programs can be attributed largely to the significant actions the SEC and CFTC have taken that signal that whistleblowers will be rewarded and protected for their information and assistance.

As a result of the SEC whistleblower program, more than $874 million in financial remedies have been collected from companies in financial penalties and disgorgement since the program was established in 2011. Because the totals attributed to the whistleblower program are only reported after a whistleblower award has been made, the reported totals lag behind the amounts actually recovered. I believe that the actual amounts the SEC has recovered by virtue of whistleblower information exceed $1.5 billion.

Last year, the SEC surpassed the $130 million mark in total awards paid to whistleblowers. The SEC also set a new bar for whistleblower protection, demonstrating that it will go after companies that retaliate against whistleblowers or have severance or confidentiality agreements that aim to discourage employees from reporting wrongdoing to government enforcement agencies.

The CFTC, meanwhile, paid out in 2016 its largest ever award — $10 million — to a single whistleblower.

With that momentum, 2017 is shaping up to be another transformative year for these programs. Here’s what to expect: Continue reading

Evolution of the CFTC’s Whistleblower Program

by Douglas K. Yatter, Yvette D. Valdez, and J. Ashley Weeks

Financial services firms and market participants face an ever-evolving landscape of regulatory programs designed to encourage and enable whistleblowers to report potential misconduct. On August 30, 2016, the US Commodity Futures Trading Commission (CFTC) published proposed amendments to its whistleblower program.[1] Drawing from the agency’s experience in administering its program over the past five years, as well as strides the US Securities and Exchange Commission (SEC) has made in administering its analogous program, the CFTC’s proposal aims to enhance the whistleblower review process and adopt new enforcement authority for whistleblower retaliation. Continue reading