CFTC Acting Chairman Pham Announces Effort to Quickly Resolve Recordkeeping and Reporting Investigations and Pledges Additional Guidance on Self-Reporting and Cooperation

During her keynote address at the Futures Industry Association’s International Futures Industry Conference, BOCA50, CFTC Acting Chairman Caroline D. Pham announced a “a new 30-day compliance and remediation initiative or enforcement sprint” to encourage market participants to resolve open investigations regarding minor compliance violations with no customer harm, in order to free up Division of Enforcement (the “Division”) resources to focus on market abuse and fraud, and seek recoveries for victims.[1] This effort is another in a series of steps Acting Chairman Pham has taken since her appointment to provide transparency and due process in the agency's law enforcement function,[2] and to address the CFTC’s shift in “its enforcement program to focus on registration and compliance instead of the CFTC’s mission to prevent fraud, manipulation, and abuse in our markets.” [3]

Under the new effort, over the next two weeks, the Division of Enforcement (the “Division”) is inviting market participants that have open investigations and enforcement matters with the Division, or are willing to self-report a material violation, regarding “compliance violations, such as recordkeeping, reporting or other compliance violations without customer harm or market abuse” to approach Division staff, copying the Chuck Marvine, the Acting Chief of Retail Fraud and General Enforcement Task Force, and Brian Young, Director of Enforcement. In approaching the Division, the market participants should include, “at a minimum,”  (1) an update “on remediation plans and progress towards completion, such as a presentation, white paper, or other submission” and (2) a “reasonable settlement offer based on historical [civil monetary penalties] in comparable cases” and application of the CFTC’s February 25 Self-Reporting, Cooperation and Remediation Advisory (February 25 Advisory).[4] Importantly, the Division will only consider such a proposal only if the violations do not involve customer harm, market abuse, concerns with transparency or fraudulent conduct, such as recordkeeping or swap data reporting violations. If the Division determines that a market participant meets these conditions, the Division will analyze civil monetary penalties for similar conduct over the last 10 years and propose an expedited settlement with a reasonable civil monetary penalty, based on the circumstances of the case. 

Additionally, Acting Chairman Pham indicated that the Division’s recent guidance regarding self-reporting and cooperation[5] is only the first step in the Division’s effort to provide regulatory clarity to market participants. Specifically, she noted that this “enforcement sprint” will “establish the CFTC’s approach to and application of the February 25 Advisory, and that the CFTC plans to issue additional guidance in the coming weeks that address how matters are referred to the Division from other CFTC operating divisions, including criteria for how those referral decisions will be made.[6] 
 

[1]See Keynote Address by Acting Chairman Caroline D. Pham, FIA BOCA50 (Mar. 11, 2025), available at https://www.cftc.gov/PressRoom/SpeechesTestimony/opapham13.

[2]See Katten’s coverage of the CFTC’s Guidance on Self-Reporting and Cooperation here: https://katten.com/clearer-skies-ahead-cftc-enforcement-divisions-new-advisory-opens-doors-for-self-reporting-and-increased-cooperation.

[3]See Statement of Commissioner Caroline D. Pham on Swap Data Reporting Settlement Order and the Examination Process (Oct. 1, 2024), available at https://www.cftc.gov/PressRoom/SpeechesTestimony/phamstatement100124.

[4]See Keynote Address by Acting Chairman Caroline D. Pham, FIA BOCA50 (Mar. 11, 2025), available at https://www.cftc.gov/PressRoom/SpeechesTestimony/opapham13.

[5]See CFTC Div. of Enforcement, Advisory on Self-Reporting, Cooperation, and Remediation (Feb. 25, 2025)  available at https://www.cftc.gov/media/11821/EnfAdv_Resolutions022525/download.

[6]See Keynote Address by Acting Chairman Caroline D. Pham, FIA BOCA50 (Mar. 11, 2025), available at https://www.cftc.gov/PressRoom/SpeechesTestimony/opapham13.