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CFTC issues new civil monetary penalty guidance

Agency Rule-Making & Guidance CFTC Enforcement Civil Money Penalties

Agency Rule-Making & Guidance

On May 20, the CFTC’s Division of Enforcement issued new civil monetary penalty guidance—the first such public issuance since 1994. The guidance, which has been incorporated into the Division’s Enforcement Manual, outlines a three-pronged approach enforcement staff will apply when evaluating the appropriate penalty for recommendation to the Commission: (i) “the gravity of the violation,” which may include the nature and scope of a violation, a respondent’s role in the violation, whether the conduct was intentional or willful, and the nature and scope of any consequences resulting from the violations; (ii) “mitigating and aggravating circumstances,” such as a respondent’s post-violation conduct, whether the respondent self-reported the misconduct, the extent of cooperation and remediation, and a respondent’s prior misconduct; and (iii) “other considerations,” including factors such as timely settlements and remedies and monetary relief to be imposed in parallel actions by other criminal authorities or self-regulatory agencies and organizations. “In applying the various factors, staff will be guided by the overarching consideration of ensuring that any proposed penalty achieves the dual goals of specific and general deterrence,” CFTC Director of Enforcement James McDonald stated.

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