Friday, November 25, 2016

CFTC FY 2016 sees 68 enforcement cases, $1.29B in sanctions

By Amy Leisinger, J.D.

The CFTC has released its enforcement results for FY 2016, highlighting 68 enforcement actions addressing a wide range of misconduct and just shy of $1.3 billion in monetary sanctions. The agency and its Enforcement Division also pursued litigation in over 100 cases involving, among other things, manipulation, spoofing, and unlawful use of customer funds, and issued its largest whistleblower award to date—$10 million.

Notable actions. The CFTC spotlighted two actions charging employees with trading on material, nonpublic information in breach of their duties for their personal benefit and a $100 million action against JP Morgan for failure to disclose certain conflicts of interest to wealth management clients. In addition, the agency brought nine actions against registered swaps dealers and futures commission merchants for failure to report accurately trading and market information and to maintain proper records. The CFTC also called attention to an action against a natural gas firm and a trader for attempted manipulation of natural gas monthly index settlement prices (which resulted in a $3.6 million penalty) and multiple proceedings involving fraud on retail customers.

Sanctions and cooperation. The agency also noted that, during FY 2016, it collected over $484 million in civil monetary penalties, $748 million in civil monetary penalties, and $543 million in restitution and disgorgement. The Enforcement Division continued to cooperate with foreign regulators in combating international compliance failures and instances of misconduct and with domestic criminal authorities in order to pursue appropriate criminal sanctions for willful violations, the CFTC stated.

“The Division’s work over the past year demonstrates that those who would cheat or defraud investors in our markets, or undermine the integrity of the markets themselves, will face the determined efforts of the CFTC,” said Enforcement Director Aitan Goelman.