The CFTC Division of Swap Dealer and Intermediary Oversight ("DSIO") affirmed that it would not recommend any enforcement action against several commodity pool operators ("CPOs") for failing to register as a CPO. The DSIO required each CPO to delegate its responsibilities under CEA Section 4m(1) to a registered CPO, subject to certain conditions.
In CFTC Letters 18-22, 18-23 and 18-24, the DSIO noted that although the CPOs failed to meet one of the criteria instituted by CFTC Letter 14-126, requiring the delegating and designated CPOs to be under common control, the DSIO determined that the parties are "jointly and severally liable" for violations of the CEA and CFTC regulations.
Commentary / Bob Zwirb
These Letters provide another example of a common fact situation where it should not be necessary for firms to seek individualized relief.
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