CFTC Fines 69 Firms in 2019
The 2019 Annual Enforcement & Compliance Results were released by the Commodity Futures Trading Commission this week. This report mentioned numerous high-impact cases involving the CFTC charging firms with spoofing, fund manipulation and unlawful use of customer funds. During the regulator’s fiscal year, they noted that throughout these various cases, more than $1.3 Billion in penalties and restitution was acquired by the regulator. Though this shows the capabilities of the CTFC, it’s also a 39% increase as opposed to the previous year.
The Enforcement and Compliance Report specified 69 cases, which is two higher than the previous amount last year. CFTC noted in their results that acquiring the restitution and penalties required complex litigation on their lawyer’s behalf. Throughout the 69 Firms charged this year, 65% of them were fined with manipulative conduct and commodities fraud. It should be noted that this report also mentioned several new initiatives from the Division of Enforcement at the CTFC.
These initiatives would’ve included whistleblower programs, where digital firms would secretly employ unnamed individuals. After illegal data was obtained, the United States Commodity Futures Trading Commission and the Security Exchange Commission could implement charges onto these firms.
Even though none of these initiatives were launched, the CTFC provided five employees with the whistleblower award throughout 2019. Those employees earned $15 million, as opposed to previous figures over the last three years at $75 million. However, the CTFC has begun to have more confidence in their proprietary tracking technology.
When the awards were handed out to these unnamed employees, the commission revealed that it had cemented enforceable commitments through their recent settlements. Subsequently, the same issues that have been facing the regulator since 2015 won’t be as present going forward.
Though the Commodity Futures Trading Commission didn’t provide extensive details over those firms charged, some minor information was released. It’s known that the first firm charged in 2019 was a Bitcoin Exchange, who received a $147 million penalty. This was the only case mentioned, with the United Stated Regulator noted that the commodities and derivatives market would be more satisfactory going forward thanks to the litigation of this case.
The report officially states: “Notably, enforcement activity at the commission shows no sign of slowing down as we enter the new Fiscal Year (2020). On July 15, 2019, Heath P. Tarbert was sworn in as the Fourteenth Chairman of the CFTC. Chairman Tarbert has made clear that, under his leadership, the CFTC will be tough on those who break the rules. He has carried through on that commitment, with the commission having filed 48 enforcement actions from July 15 through September 30 (nearly 70% of the actions for FY 2019).”