On May 20, the Commodity Futures Trading Commission’s Division of Enforcement (Division) issued new guidance (Guidance) outlining factors the Division will consider in recommending civil monetary penalties (CMPs) imposed by the CFTC in enforcement actions. This is the first publicly issued Division CMP guidance since the CFTC published its penalty guidelines in 1994. The Guidance is designed to provide market participants with greater transparency as to Division staff’s decision-making criteria regarding CMPs.

The Guidance identifies three factors that will inform the Division’s recommendations regarding an appropriate penalty: (1) the “gravity of the violation” (including, but not limited to, facts surrounding the respondent’s role in the applicable violation and the nature and scope of any consequences flowing from such violation); (2) “mitigating and aggravating circumstances” (including, but not limited to, the respondent’s conduct, such as self-reporting the misconduct, and whether any acts of concealment or obstruction occurred); and (3) “other considerations” (including, but not limited to, whether a timely settlement was reached and other remedies and sanctions to be imposed in parallel actions by other civil or criminal authorities or self-regulatory agencies). In applying these factors, Division staff will be guided by aligning the proposed penalty with the dual goals of specific and general deterrence.

The Guidance is available here.