On January 19, 2017, the Commodity Futures Trading Commission (CFTC or Commission) issued two new Enforcement Advisories outlining factors that it will consider in evaluating cooperation in CFTC investigations and enforcement actions. The two Advisories, one for individuals and one for companies, set out a list of factors through which the CFTC’s Enforcement Division will assess cooperation above what the law already requires. When weighing possible reductions in sanctions, the Commission is looking for cooperation that is “sincere, robustly cooperative, and indicative of willingness to accept responsibility for misconduct, where appropriate.” The Advisory for individuals may be accessed here
; and the Advisory for companies may be accessed here
The Advisories set forth detailed criteria for determining cooperation, including: i) the value of the cooperation to the Enforcement Division’s investigations and enforcement actions (e.g., timeliness of the cooperation, the truthfulness and completeness of the information, and whether such cooperation was voluntary or resulted in any unique hardships); ii) the value of the cooperation to the CFTC’s broader law enforcement interests (e.g., Commission resources conserved as a result, the type of entity involved, and whether the misconduct exposes an industry-wide practice that addresses a Commission priority); iii) the culpability of the company or individual and other relevant factors (e.g., the individual’s role in the misconduct and any remedial measures taken as a result of the misconduct); and iv) uncooperative conduct that offsets or limits credit that the company or individual would otherwise receive. The Advisories note that any determination of a reduction in sanctions for cooperation is up to the discretion of the Enforcement Division, which will consider the relevant factors on a case-by-case basis.
The Advisories complement the Commission’s Whistleblower Program, established pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, which provide monetary incentives, as well as privacy, confidentiality and anti-retaliation protections for whistleblowers. While the Whistleblower regulations do not provide individuals who provide information to the Commission with immunity from prosecution, the Division of Enforcement will take the whistleblower’s cooperation into consideration in accordance with its sanctions recommendations to the Commission. 17 C.F.R. § 165.16. The statute and implementing regulations provide for payments of between 10 percent to 30 percent of monetary sanctions to eligible whistleblowers for original information leading to a successful enforcement action. See Section 748 of the Dodd-Frank Act. See also 7 USC § 26(a), (b); 17 C.F.R. § 165.8. The statute and regulations also set forth a number of criteria for the Commission to consider when determining a whistleblower award, which parallel the criteria for determining cooperation set forth in the advisories, including: i) the significance of the whistleblower information; ii) degree of whistleblower assistance; iii) the value of the whistleblower’s information to the programmatic interests of the CFTC in deterring violations; and iv) any other relevant factors that the CFTC may establish by rule or regulations. See 7 USC § 26(c); 17 C.F.R. § 165.9.
For more information on the Enforcement Advisories and other CFTC issues, please contact Peter J. Scanlon
or Bhaveeta K. Mody