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CFTC Division of Enforcement Civil Monetary Penalty Guidance and Seeks Public Comments on Strategic Plan

CFTC Division of Enforcement Issues Civil Monetary Penalty Guidance

On May 20, the Commodity Futures Trading Commission’s Division of Enforcement (Division) issued new guidance (Guidance) outlining factors the Division will consider in recommending civil monetary penalties (CMPs) imposed by the CFTC in enforcement actions. This is the first publicly issued Division CMP guidance since the CFTC published its penalty guidelines in 1994. The Guidance is designed to provide market participants with greater transparency as to Division staff’s decision-making criteria regarding CMPs.

The Guidance identifies three factors that will inform the Division’s recommendations regarding an appropriate penalty: (1) the “gravity of the violation” (including, but not limited to, facts surrounding the respondent’s role in the applicable violation and the nature and scope of any consequences flowing from such violation); (2) “mitigating and aggravating circumstances” (including, but not limited to, the respondent’s conduct, such as self-reporting the misconduct, and whether any acts of concealment or obstruction occurred); and (3) “other considerations” (including, but not limited to, whether a timely settlement was reached and other remedies and sanctions to be imposed in parallel actions by other civil or criminal authorities or self-regulatory agencies). In applying these factors, Division staff will be guided by aligning the proposed penalty with the dual goals of specific and general deterrence.

The Guidance is available here.

CFTC Seeks Public Comments on 2020-2024 Strategic Plan

On May 19, the Commodity Futures Trading Commission published in the Federal Register a request for public comment on the CFTC’s draft 2020-2024 Strategic Plan (Strategic Plan). The current draft of the Strategic Plan includes a discussion of the CFTC’s mission, vision, core values, strategic goals and strategic objectives. The proposed strategic goals include:

  • strengthening the resilience and integrity of the derivatives markets while fostering their vibrancy;

  • regulating the derivatives markets to promote the interests of all Americans;

  • encouraging innovation and enhancing the regulatory experience for market participants at home and abroad;

  • being tough on those who break the rules; and

  • focusing on the CFTC’s unique mission and improving its operational effectiveness.

The comment period will be open through June 18, 2020.

The Federal Register release is available here.

The draft Strategic Plan is available here.

©2020 Katten Muchin Rosenman LLP

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About this Author

Kevin M. Foley, Finance Lawyer, Katten Llaw Firm
Partner

Kevin M. Foley has extensive experience in commodities law and advises a wide range of clients, both in the United States and abroad, on compliance with the Commodity Exchange Act and the rules of the Commodity Futures Trading Commission (CFTC) affecting traditional exchange-traded products, as well as the over-the-counter markets involving swaps and other derivative instruments. His clients include futures commission merchants, derivatives clearing organizations, designated contract markets, foreign boards of trade and an industry trade association.

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312-902-5372
Stanley V. Polit, Katten Muchin, Financial Services lawyer, Corporate Regulatory Matters Attorney
Associate

Stanley Polit concentrates his practice in transactional, corporate and regulatory aspects of financial services matters. Stan is able to provide legal services to a wide variety of clients including proprietary trading firms, hedge funds, broker-dealers, registered investment advisers, commodity trading advisers, financial institutions and general corporate clients.

Prior to joining Katten, Stan served as a council member for a national crisis management firm, where he specialized in crisis communication and merged media strategies. He has lectured extensively and conducted trainings related to these topics at numerous national and international conferences, including the National Communication Association's National Convention, the International Crisis and Risk Communication Conference and the Disaster Recovery Journal's World Business Continuity Conference.

312.902.5420