Commodity Futures Trading Commission Division of Enforcement issues advisory on Department of Justice referrals for criminal regulatory offenses

The Commodity Futures Trading Commission’s Division of Enforcement (DOE) issued an advisory setting out how it will address criminally liable regulatory offenses under Executive Order 14294, Fighting Overcriminalization in Federal Regulations. The advisory establishes the framework DOE will apply when deciding whether to refer potential violations of criminal regulatory offenses to the US Department of Justice (DOJ). In assessing whether to make a referral, DOE staff are directed to consider factors including the harm or risk of harm caused, the potential gain to the alleged defendant, whether the alleged defendant had specialized expertise or relevant licensing, indications of awareness that the conduct was unlawful and knowledge of the regulation at issue, any recidivism or pattern of misconduct, and whether DOJ involvement would provide additional meaningful protection to derivatives market participants. The advisory is issued under section 7 of the Executive Order in place of publication in the Federal Register, noting there is currently no majority vote of the Commission to authorize Federal Register publication.