United States: The Resurrection Of CFTC Administrative Enforcement Proceedings: Efficient Justice Or A Biased Forum?

Summary

In the wake of the broad new enforcement authority provided to the Commodity Futures Trading Commission ("CFTC" or "Commission") in the Dodd-Frank Reform and Consumer Protection Act ("Dodd-Frank"), and severe constraints on agency enforcement resources, the Director of the CFTC's Division of Enforcement ("Division") recently stated that the Division intends to increasingly rely on the CFTC's administrative enforcement process, as opposed to filing a complaint in federal court, to prosecute violations of the Commodity Exchange Act ("CEA").¹ The Division Director explained that the "overwhelming reason for this change is [the agency's lack of] resources,"² including its "bandwidth for discovery-intense litigation,"³ but added that the administrative process would also allow the Commission to develop its expertise and the case law with respect to the new statute and regulations.⁴

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Originally published in the March 2015 edition of The Journal of Investments & Risk Management Products Futures & Derivatives Law Report, Vol. 35, Issue 2.

The author is a partner in the law firm Wilmer, Cutler, Pickering, Hale and Dorr, LLP, and served as General Counsel of the CFTC from 2009-2013.

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