The U.S. Commodity Futures Trading Commission set a record for its largest amount of civil monetary penalties from enforcement actions in fiscal year 2015, announcing $3.144 billion in wrongdoer penalties.
The CFTC pursued a number of high dollar actions in FY2015, including imposing an $800 million penalty against Deutsche Bank for LIBOR manipulation. The amount was the largest monetary penalty in CFTC history. The commodities regulator also brought actions for manipulation of benchmark rates in the Forex currency market and the ISDAfix.
Fraud, spoofing and market manipulation were among the focus areas in the 69 enforcement actions filed by the CFTC this past year. Among the actions specifically highlighted was the initiation of prosecution against UK trader Navinder Sarao for his role in the 2010 flash crash. The Kraft Foods/Mondelez action over manipulation of wheat prices and excess position limits is also highlighted in the anti-manipulation efforts.
Many of the enforcement actions contained parallel criminal proceedings or cooperative enforcement actions with other agencies. Parallel actions led to $4.2 billion in penalties and fines in the Forex and Libor manipulation actions as well as restitution orders of over $265 million in criminal judgements.
CFTC enforcement has been substantially higher than normal over the past three years. In FY2014, the agency imposed civil monetary penalties of $1.8 billion on its way to total sanctions of $3.27 billion (the other $1.4 billion constituted restitution and disgorgement). In FY2013, the CFTC scored $1.5 billion in civil monetary penalties and $200 million in restitution and disgorgement. The press release this year did not mention a dollar figure for restitution and disgorgement.
The CFTC also announced its second whistleblower award in 2015. Although the awards coming out of the commodities regulator have reached neither the size nor the quantity of the much larger Securities and Exchange Commission, the record amount of penalties suggest that there could be some big awards coming in the future. In May, the head of the CFTC Office of the Whistleblower told Law360 that the agency would soon dole out big payouts for big enforcement actions.
Whistleblower awards are not announced immediately after the enforcement action, so it is still possible that one of this year’s big penalties will result in an award. Instead, there is a notice period for anyone to file a claim for a reward and then a period where the agency considers the application, communicates the initial decision to the applicant and solicits additional comments prior to making a decision announcement.
Our CFTC whistleblower attorneys can assist you with answers to questions about this information as well as assistance reporting violations of the Commodity Exchange Act to the U.S. Government. To speak to an attorney, fill out our contact form or call 1-800-590-4116.