CFTC Commissioner Calls for Greater Transparency in Enforcement Credit Decisions

CFTC Commissioner Christy Goldsmith Romero called for the agency to adopt greater transparency in enforcement decisions and outlined her framework for evaluating self-reporting, cooperation and remediation in enforcement matters.

The Commissioner's statement supplements a February 2025 Division of Enforcement Advisory on Self-Reporting, Cooperation and Remediation, which introduced a Mitigation Credit Matrix with penalty reductions ranging from 10% to 55%. (See related coverage.)

Commissioner Goldsmith Romero stated: "The best way to provide incentives to cooperate is for the CFTC as an agency to increase transparency into how the CFTC evaluated each of those factors, rather than relying on limited discussion of those factors, supplemented by individual Commissioner statements."

The Commissioner detailed a seven-factor framework when evaluating the outcome of an enforcement case. These include a review of:

• Recidivism and Parallel Cases: She said that a repeat or parallel defendant may receive diminished credit. Ms. Goldsmith Romero criticized narrow definitions of recidivism and emphasized cross-agency history and systemic failures.

• Harm Posed: She said that cases involving harm to retail customers, vulnerable individuals, or market integrity warrant stronger resolutions.

• Scienter: She argued that high levels of intent or willful misconduct reduce eligibility for credit. Ms. Goldsmith Romero also opposed the Advisory's suggestion that "first in" defendants in fraud cases could receive full declinations.

• Nature of Charges and Parties Charged: She said that forgoing potential charges may constitute significant non-monetary credit.

• Acceptance of Responsibility: She said that defendants may earn credit through full cooperation, public admissions and meaningful remedial actions. Ms. Goldsmith Romero highlighted her 2022 creation of the HEAT ("Heightened Enforcement Accountability and Transparency") test, which influenced 57 cases requiring admissions.

• Accountability and Deterrence: She said that penalties should reflect both specific and general deterrence and be tailored to the gravity of the case, rather than strictly following precedent.

• Other Remedies and Undertakings: She advocated for transparency around remedies such as statutory disqualifications, trading bans and compliance undertakings—particularly when credit is given for voluntary remediation.

Ms. Goldsmith Romero also said that enforcement documents should clarify when penalties were reduced due to extenuating factors, such as financial condition or duplicative penalties in parallel cases.