CFTC Commissioner Rostin Behnam called for cooperative efforts between the CFTC and market participants to deter disruptive trading activity. In remarks before Energy Risk USA in Houston, he emphasized the need for the CFTC to provide clear guidance and expectations, and for market participants to actively participate in efforts to police bad actors.
Mr. Behnam highlighted the success of the CFTC Division of Enforcement in addressing spoofing and other disruptive market behavior. He acknowledged the strong collaboration between the CFTC and the DOJ, and noted the successful use of data and pattern recognition to detect bad behavior. He described the challenge of proving intent in these cases, stating that orders may be canceled or unfilled for legitimate reasons, and that high-frequency trading strategies may lead to a significant volume of canceled orders. Mr. Behnam explained that intent may be proven by demonstrating that a trading program was designed to aid and abet spoofing activity.
Mr. Behnam expressed that the CFTC is committed to cultivating a "compliance culture" and enhancing deterrence by (i) cooperating with law enforcement agencies, (ii) pursuing action against individual bad actors, and (iii) incentivizing whistleblowing.
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