May 12, 2019
by Elizabeth Lan Davis

On May 8, 2019, the Division of Enforcement made public its first-ever Enforcement Manual.[1]  During his remarks at the Future Industry Association’s Law & Compliance Division Conference, the Division’s Director stated that the decision to create and publish the Enforcement Manual “was rooted in the common sense notion that our policies and procedures should be readily accessible to those affected by them.”[2]  The Enforcement Manual is intended to serve as a general reference for the Division’s Staff in conducting its investigations and litigating potential violations of the Commodity Exchange Act and Commission Regulations.  The Division’s Director noted the importance of having transparent policies in order to promote consistency across the Division’s multiple offices and teams in order to promote fairness and increase predictability.     

The Enforcement Manual addresses the various stages of the Division’s investigations and litigations ranging from how leads are generated and processed, to how matters are investigated and litigated, the Division’s Wells process,[3] settlements, to coordination with other government agencies.  The continued push for self-reporting and cooperation is also apparent as the Division’s recent advisories on these issues are incorporated within the Enforcement Manual.  Moreover, the Enforcement Manual outlines several cooperation tools, such as Division Cooperation Agreements, Non-Prosecution Agreements, Deferred Prosecution Agreements, and Immunity.  An overview of the Division’s Whistleblower Office is also included.

While much of the Enforcement Manual is rooted from the Commission’s Regulations and still leaves much discretion to Division Staff, its deputies and director, it does shed some light into the Division’s processes and policies.[4]  Although the Enforcement Manual does not create any private rights, is not enforceable in court, and is not binding law, it will likely be a useful reference tool for engaging in dialogue with Division Staff during various points of the Division’s investigations and litigations.


[1] The Enforcement Manual can be found on the CFTC’s website: https://www.cftc.gov/LawRegulation/Enforcement/index.htm.

[2] Remarks of CFTC Director of Enforcement James M. McDonald at the 41st Annual Conference of the Future Industry Association’s Law & Compliance Division Conference (CFTC May 8, 2019), available at:  https://www.cftc.gov/PressRoom/SpeechesTestimony/opamcdonald3.

[3] Patterned after the SEC’s similar notification process, the Wells process refers to the Division having the authority to inform and notify persons who may be named in a proposed enforcement action of the nature of the allegations against them before the action is filed by issuing a “Wells Notice.”  Appendix A to the Part 11 of the Commission’s Regulations sets forth the procedure in which persons who have been issued a Wells Notice may submit a written statement setting forth their views on any factual, legal, or policy matters relevant to the particular investigation or proposed enforcement action.

[4] For example, the Enforcement Manual details the considerations that are taken into account in determining whether to send a closing letter when Division staff has decided to close an investigation.  See fn. 1, pp. 21-22.

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