The Enforcement Manual is intended to guide the work of the DOE and increase transparency
On May 8, 2019, the Commodity Futures Trading Commission's
("CFTC") Division of Enforcement ("DOE")
announced that it had issued an Enforcement Manual that
"establishes certain general policies and procedures that
guide the work of the DOE staff in detecting, investigating, and
prosecuting violations of the Commodity Exchange Act (CEA) and the
CFTC Regulations." This is the first time that the DOE has
published an Enforcement Manual, and the accompanying press release
indicates that it is intended to "increase transparency,
certainty, and consistency" in CFTC enforcement actions.
The Enforcement Manual is a dense, 52-page document that, among
other things: (i) provides background information regarding the
CFTC and the DOE; (ii) describes the "life cycle" of DOE
enforcement matters (including how leads for new investigations are
generated); (iii) describes how the DOE collects information for
use in its investigations, and the privileges that may limit the
scope of such collection; (iv) provides guidance on the Wells
notice and submission process; (v) describes the CFTC's efforts
to work "cooperatively and in parallel with criminal
authorities and other federal, state, or international
regulators"; and (vi) describes the types of enforcement
actions the CFTC may commence and the manner in which those actions
may be resolved. The Enforcement Manual also summarizes the
CFTC's self-reporting and cooperation advisories as well as its
whistleblower program, which should be of interest to market
participants.
In public statements accompanying the release of the Enforcement
Manual, CFTC Director of Enforcement Jamie McDonald made clear that
the Enforcement Manual "is not binding law," does not
create any "private rights," and is not "enforceable
in court." Mr. McDonald also indicated that he expects the
Enforcement Manual to be "a living document" that changes
over time as the DOE refines its thinking regarding appropriate
policies and procedures. Thus, while the Enforcement Manual is
clearly an important document and a meaningful step by the DOE to
increase transparency, market participants should be aware of its
limitations and should monitor the CFTC's website to keep
abreast of any changes in the DOE's policies.
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