Securities Regulation Daily Wrap Up, CFTC NEWS AND SPEECHES—CFTC Division of Enforcement’s policy guides cooperation, as outlined in staff advisory, (May 20, 2026)

By Rebecca E. Hoffman, J.D.

The Division has discretion to award cooperation “credit” in whole or in part depending on various circumstances.

The Commodity Futures Trading Commission, on May 19, issued an advisory setting forth the Division of Enforcement’s new policy, which is designed to steer market participants toward cooperating with enforcement efforts by providing incentives to report, address, and alleviate misconduct ahead of any agency action whenever possible.

“The new cooperation policy provides a clear path to declinations,” Director of Enforcement David I. Miller said in a press release. “It [also] stat[es] what the division requires of parties to obtain credit for self-reporting and cooperation, [thereby] encourag[ing] good conduct from market participants and giv[ing] us another tool in our efforts to fight fraud, manipulation, and market abuse.”

Path to declination. According to the advisory, a party that voluntarily self-reports conduct potentially violative of CFTC laws and regulations can secure a declination, meaning that the Division will not recommend that the Commission institute an enforcement action, but this depends on several factors. First, the party must have made a voluntary self-report, which is defined as a report made in good faith, made “before any known or reasonably anticipated imminent threat of disclosure” by others (such as a whistleblower), made promptly after learning of the misconduct, and that contains all information about the misconduct unless privileged.

Second, the party must provide full cooperation, defined as turning over information and updating it in a timely manner, identifying everyone responsible for the misconduct, being proactive, and making officers and employees available for interviews. The reporting party must also remediate the misconduct and provide restitution and disgorgement if applicable. Declination may not be afforded if there are aggravating circumstances, such as “pervasive” or “recidivist intentional or reckless misconduct.”

Remediation must include an analysis of the cause of misconduct, implementation of a program to achieve compliance, incentives for compliance, discipline of employees responsible for misconduct and those who supervise them, and record retention procedures.

Partial credit. If the report does not meet the definition of “Voluntary Self-Report” or there are aggravating factors, but the party otherwise cooperated, the Division “will incorporate cooperation credit into its recommendation” so that the reporting party earns a reduction of penalties. Further, the Division may exercise discretion to award credit where there was some amount of cooperation, such as “Full Restitution and/or Disgorgement.”

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