Looks like the huge warchest which the US Senate has granted CFTC a year ago has paid off – CFTC has significantly increased its enforcement capabilities and during this fiscal year filed 57 enforcement actions – 14% more than in 2009 and 42% more than in 2008. CFTC was given a record $146 million, supported by the latest financial crisis, by the Senate to tackle the market manipulations and inefficiencies amongst other things. 14 cases out of 57, that’s 25%, involved retail foreign currency fraud – which is amazing but not surprising as forex represents a tiny portion of the financial markets but we all know how common the fraud in this space is.
You’ve seen the details of some of these actions on the pages of this blog, most notorious of them all was the Trevor Cook case.
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) announced today that its enforcement program filed 57 enforcement actions in Fiscal Year (FY) 2010 – 14 percent more than in FY 2009 and 42 percent more than in FY 2008. The Division of Enforcement’s filings involve allegations of manipulation, fraud, abuse and other violations of the Commodity Exchange Act. These 57 actions have resulted in more than $186 million in civil monetary penalties, restitution and disgorgement. Additionally, the Division of Enforcement opened 419 investigations in FY 2010 – an all-time high, which is 66 percent more than the 251 investigations opened in FY 2009.
Overview of CFTC Enforcement cases filed in FY 2010
Of the 57 actions filed during FY 2010, 15 involved commodity pool frauds and 14 involved retail foreign currency (forex) fraud.
Below is a breakdown of FY 2010 enforcement filings by category:
Manipulation, Attempted Manipulation and False Reporting 6
Commodity Pools, Hedge Funds, Commodity Pool Operators and Commodity Trading Advisors 15
Legal Risk Factor Beneath Ripple’s Lawsuit from SECGo to article >>
Fraud By Futures Commission Merchants, Introducing Brokers and Their Associated Persons 2
Forex Fraud 14
Financial, Supervision, Compliance and Recordkeeping 8
Trade Practice 11
Statutory Disqualification 1
Fighting fraud and manipulation
The Division of Enforcement continued to actively prosecute fraud and manipulation in FY 2010. The CFTC filed six complaints charging manipulation, attempted manipulation or false reporting, five more than in the previous fiscal year. The Division also saw a sharp increase in the number of trade practice violations charged, from three in FY 2009 to 11 in FY 2010.
Cooperative investigation and prosecution
The CFTC Division of Enforcement continues to actively engage in cooperative enforcement with federal and state criminal and civil authorities. During Fiscal Year 2010, more than 95 percent of the CFTC’s major injunctive fraud cases involved related criminal investigations and, to date, more than 65 percent of those investigations have resulted in criminal indictments.