CFTC Issues Advisory on Enforcement Resolutions

<p>The
Commodity Futures Trading Commission's (CFTC) Division of Enforcement has
released an advisory designed to offer its enforcement staff clear guidance on
recommendations for future enforcement resolutions to the Commission. </p><p>CFTC's Focus on Reducing Repeat
Offenders</p><p>This
advisory addresses key aspects of enforcement, including civil monetary
penalties, corporate compliance monitors, consultant appointments, and the consideration
of admissions in specific cases.</p><p>CFTC
Chairman Rostin Behnam emphasized the importance of transparency and
accountability in enforcement actions, stating: "Today, the Division of
Enforcement announced steps showing how it will approach key terms of
resolutions—civil monetary penalties, monitors, and admissions—to ensure
greater transparency and answerability throughout the process.” </p><p>“As
our guiding statute sets forth goals of preserving market integrity and
protecting the public, it is our duty to ensure that every enforcement action
aims to elevate compliance and optimize deterrence."</p><p>Enforcement
Director Ian McGinley echoed this sentiment, highlighting the <a href="https://www.financemagnates.com/tag/cftc/">CFTC</a>'s objectives of
accountability and preventing future misconduct. He explained: "Accountability
and minimizing future misconduct are important Commission and Division
objectives.” </p><p>“We
cannot keep seeing the same entities before us with the same problems. This
advisory provides staff the guidance to achieve these objectives and enables
the public to understand how the Division will operate."</p><blockquote><p lang="en" dir="ltr">Statement of <a href="https://twitter.com/CFTCcgr?ref_src=twsrc%5Etfw">@CFTCcgr</a> on <a href="https://twitter.com/CFTC?ref_src=twsrc%5Etfw">@CFTC</a> Enforcement Division Advisory Regarding Penalties, Monitors and Consultants, and Admissions: <a href="https://t.co/7JPS1GLCoh">https://t.co/7JPS1GLCoh</a></p>— CFTC (@CFTC) <a href="https://twitter.com/CFTC/status/1714416316252127498?ref_src=twsrc%5Etfw">October 17, 2023</a></blockquote><p>Revising
the Approach: Assessing Civil Monetary Penalties </p><p>The
advisory focuses on several key topics:</p><p>Deterring
Misconduct Through Appropriate Penalties: The Division is revising its
approach to assessing proposed civil monetary penalties (CMPs) to ensure they
are sufficient for achieving both general and specific deterrence. </p><p>This
may result in the Division recommending higher penalties than previously
imposed in similar cases. The advisory also notes that the Division will
consider recidivism when determining appropriate penalties, detailing the
factors it will take into account.</p><p>Monitors
and Consultants – Ensuring Remediation: In cases where the Division lacks confidence that
an entity will remediate misconduct independently, it may require the entity to
engage a third party approved by the Division to assist in remediation. </p><p>This
includes Monitors, who make recommendations, test them, and report on their
results, and Consultants, who advise entities on <a href="https://www.financemagnates.com/tag/compliance/">compliance</a>
enhancements. Monitors will be recommended in cases of severe compliance and
control failures, indicating a lack of commitment to effective compliance.
Consultants will be suggested in less severe cases.</p><p>Admissions
– Achieving Accountability and Deterrence: The advisory challenges the
assumption that no-admit, no-deny resolutions are the default option. Instead,
in each case, the Division will engage with respondents or defendants to
discuss whether admissions are appropriate. The advisory outlines factors
relevant to determining the suitability of admissions.</p><p>The
advisory complements prior advisories and guidance issued by the Division. It
underscores the Division's focus on accountability and the prevention of future
misconduct when negotiating proposed resolutions recommended to the Commission.
This proactive approach is aimed at promoting greater transparency and
achieving a higher standard of integrity and public protection in the <a href="https://www.financemagnates.com/tag/financial-markets/">financial markets</a>.</p>

This article was written by Tareq Sikder at www.financemagnates.com.