CFTC Provides Guidance on Cooperation in Enforcement Actions

The CFTC Division of Enforcement issued guidance as to the standard by which it assesses a firm's level of cooperation with enforcement investigations.

The Division issued two Advisories, one as to individuals and the other as to companies (see here and here), that are intended to provide insight into how the CFTC judges effective cooperation in order to assist "counsel in assessing possible settlement positions and litigation risks." The Division stated that the level of cooperation will be considered at the following junctures of a CFTC investigation:

• during determination of whether an enforcement action is "warranted";
• the exact "nature of charges that should be brought"; and
• the "appropriate level of sanctions to impose or seek."

The Advisories updated previous cooperation guidelines to include (i) recommended self-reporting to the Division, (ii) supplying clear material evidence and value of the violation, (iii) willingness to accept responsibility if warranted and level of culpability and (iv) consideration of "uncooperative conduct that offsets or limits credit that the company or individual would otherwise receive." The CFTC stated that it is "what a company voluntarily does, beyond what it is required to do" that is a large part of its determination of level of cooperation, and consequently, any rewards. These two Advisories were issued alongside updated whistleblower guidelines.