July 8, 2020

Volume X, Number 190

July 07, 2020

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July 06, 2020

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Commodity Futures Trading Commission Issues New Guidance for Civil Monetary Penalties

The Commodity Futures Trading Commission (CFTC) recently issued new guidance outlining factors the Division of Enforcement considers in recommending civil monetary penalties in CFTC enforcement actions.  This issuance marks the first civil monetary penalty guidance issued by the Division of Enforcement since it published its penalty guidelines in 1994.

The new guidance provides enforcement staff’s three-step approach to evaluating an appropriate penalty for recommendation to the CFTC.  Staff will consider:

  • The “gravity of the violation” – the nature and scope of the violations, including the number of occurrences and duration, any efforts to conceal, and whether the violations resulted in harm to victims. Staff will also consider whether the conduct was intentional or willful, beneficial to the violator, and the impact on market integrity.

  • Any “mitigating and aggravating circumstances” – post-violation attempts to cure or efforts to conceal, self-reporting misconduct, prior misconduct, effectiveness of the company’s pre-existing compliance program, and the timeliness of remediation.

  • “Other considerations” - the mix of remedies and monetary relief to be imposed, remedies and relief imposed in parallel cases by other authorities and regulatory entities, monetary and non-monetary relief in analogous cases, and conservation of CFTC resources.

In formulating the appropriate penalty, the guidance instructs staff to take into account the goals of specific and general deterrence.  

The new guidance should benefit energy traders as well as companies trading other commodities in futures contracts by providing some clarity that can be used in the compliance training process and in enforcement investigations.

©2020 Pierce Atwood LLP. All rights reserved.National Law Review, Volume X, Number 150


About this Author

Ruta Skučas Energy Electric Natural Gas Attorney

Ruta Skučas counsels her clients on energy issues, focusing primarily on electric and natural gas matters, before the Federal Energy Regulatory Commission (FERC), state and federal entities, including federal courts and state public utility commissions. Her clients range from financial institutions and power marketers to traditional utilities.

Ruta's clients benefit from her years of experience working at FERC. Following graduation from law school, she served as law clerk to several FERC Administrative...

Valerie L. Green Pierce Atwood Partner DC  Energy Energy Infrastructure Project Development  Finance Litigation

Valerie Green focuses her practice on natural gas, electricity, renewable energy, and regulatory and compliance issues involving the Federal Energy Regulatory Commission (FERC) and other administrative agencies. Clients rely on Valerie’s responsiveness, attention to detail, and deep knowledge of regulatory process and precedent in proceedings involving administrative litigation, compliance audits and investigations, and in appellate litigation before the U.S. Court of Appeals for the District of Columbia Circuit. Valerie’s focus on coalition and consensus building in situations involving difficult, contentious issues frequently results in successful, advantageous settlements for her clients.

Valerie has extensive experience with a wide range of energy-related issues, including regulation under the Natural Gas Act, Natural Gas Policy Act of 1978, the Federal Power Act, the Public Utility Regulatory Policies Act, and FERC’s regulations implementing those statutory regimes. Valerie advises natural gas shippers on pipeline rate and tariff issues, and has advised natural gas pipelines on their rate cases, Standards of Conduct, FERC’s capacity release rules, and other regulatory issues.

Drawing on her deep knowledge of Independent System Operator and Regional Transmission Organization (ISO/RTO) tariffs and operations, Valerie regularly assists clients as they navigate electric transmission issues, and she protects her clients' business interests in the electric grid.

Maeve C. Tibbetts Pierce Atwood DC Associate Energy Infrastructure Project Development  Finance

Maeve Tibbetts focuses her practice on regulatory and enforcement matters before the Federal Energy Regulatory Commission (FERC) and state public utility commissions. Maeve represents energy traders active in the ISO/RTO markets and counsels clients involved in formal and informal investigations by FERC's Office of Enforcement.  She also represents members of the Financial Marketers Coalition in stakeholder proceedings before PJM and other ISOs/RTOs.  Her clients include financial institutions, power marketers, electric and natural gas utilities, renewable energy firms, retail electric...