The CFTC Division of Enforcement issued two Advisories that detail the factors that the agency considers when evaluating cooperation by individuals and companies in investigations and enforcement actions.
The Advisories list the following factors that help to determine the degree and quality of an individual or company's cooperation:
- the value of the cooperation in CFTC investigations or enforcement actions, assessed by determining the levels of material assistance and timeliness, and the nature and quality of the information;
- the value of the cooperation to the CFTC's broader law enforcement interests, determined by weighing the importance of the investigation and enforcement actions, the number of resources conserved due to the company or individual's assistance, and the enhancement of the CFTC's enforcement abilities resulting from the company or individual's cooperation;
- the culpability of the individual or company, given the circumstances of relevant misconduct, instances of prior misconduct, whether the individual or company attempted to mitigate any harm that it inflicted through the misconduct, whether the individual or company admitted responsibility for the misconduct, and the degree to which the individual or company would have the opportunity to commit future misconduct; and
- whether the individual or company demonstrated uncooperative conduct by failing to respond in a timely manner, misrepresenting or minimizing misconduct, and otherwise obstructing investigations, among other actions.
Both Advisories emphasized that "more than ordinary cooperation or mere compliance with the requirements of law" is required, and that the Division "looks to what a company voluntarily does, beyond what it is required to do." These factors, in turn, are tied to the "benefits" associated with cooperation, which can range from (i) recommendations of no enforcement action against the individual or company to (ii) reduced charges or sanctions in connection with enforcement actions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.