Aggregated News From Investment Management Regulators

CFTC’s Enforcement Division Issues Staff Guidance on Recognition of Self-Reporting, Cooperation, and Remediation


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— The Commodity Futures Trading Commission today announced the Division of Enforcement (DOE) issued new guidance for enforcement staff when recommending the recognition of a respondent’s cooperation, self-reporting, or remediation in CFTC enforcement orders. The guidance, which will be published in the agency’s Enforcement Manual, follows recent updates of the manual’s civil monetary penalty guidance and compliance program evaluation guidance. [See CFTC Press Release Nos. 8165-20 and 8235-20]

“As our historic performance during Fiscal Year 2020 demonstrates, the CFTC does not hesitate to take strong enforcement action when necessary to ensure compliance with federal law,” said Chairman Heath P. Tarbert. “The CFTC also will not hesitate to recognize publicly when a registrant or market participant engages in meaningful acts of self-reporting of misconduct, cooperates during investigations, and remediates. Ultimately, the purpose of the CFTC’s enforcement program is to foster a culture of compliance within the marketplaces we regulate. This staff guidance furthers that goal by ensuring the public understands the levels of recognition the CFTC may provide in its enforcement orders.”

“Providing clarity to market participants and the public is one of the CFTC’s core values,” added Acting Division of Enforcement Director Vincent McGonagle. “An effective self-reporting, cooperation, and remediation program helps to foster market integrity through timely enforcement. Through this and the other public guidance, the division seeks consistency and transparency across CFTC enforcement actions.”

The guidance describes  potential scenarios where the staff may recommend the recognition of a respondent’s self-reporting, cooperation or remediation by the Commission in an enforcement action: (i) no self-reporting, cooperation, or remediation; (ii) no self-reporting, but cognizable cooperation and/or remediation that warrant recognition but not a recommended reduction in penalty; (iii) no self-reporting, but substantial cooperation and/or recognition resulting in a reduced penalty; and (v) self-reporting, substantial cooperation, and remediation resulting in a substantially reduced penalty.

This staff guidance does not change DOE’s existing practice regarding how it will evaluate self-reporting, cooperation, or remediation, or how enforcement staff will consider reductions in penalties in connection with self-reporting, cooperation or remediation in accordance with the self-reporting and cooperation advisories issued in 2017. [See CFTC Press Release No. 7518-17] Rather, it clarifies how that recognition will be reflected in CFTC enforcement orders.

The Division of Enforcement staff members primarily responsible for this guidance are Margaret Aisenbrey, William Janulis, and Gretchen Lowe.

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Regulator Information

Abbreviation: CFTC
Jurisdiction: USA

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