CFTC Issues New Policy on Criminal Enforcement for Regulatory Violations

The CFTC issued a new "policy statement concerning agency referrals for potential criminal enforcement." 

In the published Notice, and pursuant to a recent Executive Order on "overcriminalization in federal regulations," the CFTC announced a "general policy" for determining whether to refer alleged violations of criminal regulatory offenses to DOJ. Under the new framework, staff are directed to consider: (i) the harm or risk of harm caused by the offense; (ii) the potential financial gain to the defendant; (iii) the defendant’s specialized knowledge, expertise, or licensing; (iv) evidence of the defendant’s awareness that their conduct was unlawful; (v) whether the defendant is a repeat offender or has engaged in a broader pattern of misconduct; and (vi) whether DOJ involvement would provide additional protection to participants in the derivatives markets.

The CFTC said it would submit a Report to the Office of Management and Budget by May 9, 2026, listing: (1) all criminal regulatory offenses enforceable by the CFTC or DOJ, and (2) the range of potential criminal penalties for each, including "the applicable mens rea standard."

The CFTC’s Division of Enforcement also withdrew Staff Advisory No. 25-19 on referrals for potential criminal enforcement, explaining that the advisory is no longer necessary in light of the Commission’s adoption of the new policy statement. (See related coverage.)