CFTC’s Enforcement Division Issues Staff Guidance

November 9th | 2020

The CFTC’s Director of Enforcement, Vincent A. McGonagle, recently issued guidance to staff on when to recommend that a respondent's self-reporting, cooperation or remediation be recognized in Commission enforcement orders. In his guidance, the Director sets out four levels of recognition and describes when the Commission will recommend a reduced penalty for substantial cooperation and/or remediation. The four levels are:

  1. No self-reporting, cooperation or remediation.

  2. No self-reporting, but cognizable cooperation and/or remediation that warrants recognition, but not a recommended reduction in penalty.

  3. No self-reporting, but substantial cooperation and/or remediation resulting in a reduced penalty.

  4. Self-reporting, substantial cooperation and remediation, resulting in a substantially reduced penalty.

In #3 and #4, the key lies in whether the firm substantially cooperated so as to "materially advance" the investigation and substantially addressed the misconduct or remediated in accordance with the CFTC’s 2017 self-reporting and cooperation advisories.

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