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The CFTC collected less than half as much in monetary sanctions in fiscal 2017 as it did the previous year—$413 million compared to $1.29 billion in fiscal 2016.
The overall number of enforcement actions also was down this year, 49 cases compared to 68 cases a year ago, according to statistics released Nov. 22 by the Commodity Futures Trading Commission.
Although the agency’s numbers were down, New York financial services lawyer Gary DeWaal, Katten Muchin Rosenman LLP, told Bloomberg Law he thinks the 2017 statistics “just represent a normal ebb and flow in enforcement cases and their progress.”
DeWaal, a former CFTC trial lawyer, added that Chairman J. Christopher Giancarlo “has made clear that strong enforcement is important.” He said the selection earlier this year of former Assistant U.S. Attorney James McDonald as enforcement director “is a testament to this commitment.”
“One year does not a trend make,” Tyson Slocum, a policy analyst at consumer-oriented Public Citizen, told Blooomberg Law. However, he said, if the numbers continue to fall, “it will be a bad result for investors and consumers.”
Retail fraud was the category with the most cases both this year and last—20 and 30 actions respectively. Market manipulation was in second place in 2017, with 12 cases, followed by reporting/recordkeeping (7) and protection of customer funds (6). Last year, retail fraud was followed by reporting/recordkeeping (9 cases), protection of customer funds and illegal, off-exchange contracts saw 8 cases apiece. The agency only brought one action for off-exchange contracts this year.
“This is something that needs to be monitored carefully in light of the commission’s statements supporting a lighter enforcement touch,” Slocum, who also serves on the agency’s Energy and Environmental Markets Advisory Committee, said.
The CFTC didn’t immediately respond to requests for comment.
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