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Financial Regulation and Compliance: How to Manage Competing and Overlapping Regulatory Oversight, + Website by H. David Kotz

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CHAPTER 9 How to Defend CFTC Enforcement Actions

The CFTC, through its Division of Enforcement, also investigates and prosecutes alleged violations of the CEA and CFTC regulations. The CEA makes it illegal to trade a contract for the purchase or sale of a commodity for future delivery – a “futures contract” – unless the contract is executed on a federally designated exchange. The Division of Enforcement bases investigations on information it develops independently, as well as information provided by other CFTC divisions; industry self-regulatory associations; state, federal, and international authorities; and members of the public. When the CFTC obtains evidence that criminal violations of the CEA have occurred, it may refer the matter to the Department of Justice for prosecution. Criminal activity involving commodity-related instruments can result in prosecution for criminal violations of the CEA and for violations of other federal criminal statutes, including commodities fraud, mail fraud, wire fraud, and conspiracy.

9.1 INCREASED AGGRESSIVENESS ON THE PART OF CFTC ENFORCEMENT

During the past several years, Congress has substantially expanded the CFTC's regulatory reach and the CFTC has become more aggressive in conducting enforcement. The CFTC has dramatically increased its annual enforcement action totals, and has imposed record high financial penalties on many market participants. In fiscal year 2014, the CFTC filed 67 new Enforcement actions and obtained a record $3.27 ...

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