CFTC Division of Enforcement Director James McDonald pledged to enforce Commodity Exchange Act ("CEA") provisions that encompass foreign corrupt practices and issued an Enforcement Advisory on cooperation and self-reporting for violations of the CEA pertaining to foreign corrupt practices.
In remarks at the American Bar Association's 2019 National Institute on White Collar Crime, CFTC Director of Enforcement James McDonald said that foreign corruption is the type of misconduct that may lead to price alterations and the undermining of domestic markets. He stated: "we are committed at the CFTC to enforcing the CEA provisions that encompass foreign corrupt practices." He noted that the CFTC recognizes that CFTC enforcement of CEA provisions that encompass foreign corrupt practices includes misconduct that "might also violate the Foreign Corrupt Practices Act, and thus might be subject to prosecution under that statute by our partners at DOJ or the SEC." He asserted that the CFTC would avoid duplicative efforts by coordinating with those agencies.
In addition, Mr. McDonald described a new Division Enforcement Advisory on cooperation and self-reporting for violations of the CEA pertaining to foreign corrupt practices. He said that if a company or individual not registered with the CFTC self-reports a violation, cooperates and appropriately remediates, the CFTC will - absent "aggravating circumstances" - recommend a resolution with no civil monetary penalty, though the company or individual will remain obligated to pay disgorgement and restitution. Aggravating circumstances could include such factors as whether senior management was involved with the misconduct, whether the misconduct was pervasive within the company, and whether there was a prior history of wrongdoing. CFTC registrants are not eligible for the "presumptive recommendation of no penalty" as explained in the Enforcement Advisory.
Commentary / Joseph V. Moreno
It is somewhat surprising that, under leadership installed by an Administration initially perceived to be skeptical of the FCPA, the CFTC is aggressively moving into the anti-foreign corruption space. The CFTC can certainly bring resources to the international fight against foreign bribery and corruption, the enforcement of which has continued largely unabated under the Trump Administration. Let's just hope that Director of Enforcement McDonald is true to his word and that this new effort does not become a "pile on" exercise of multiple agencies pursuing the same alleged wrongdoing.
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