The CFTC’s New 30-Day Compliance and Enforcement “Sprint” Provides Derivatives Market Participants with a Unique Opportunity
Client Alert | March 17, 2025
While financial regulators have recently been closing particular matters, time is of the essence and firms should carefully consider their circumstances and whether and how to engage with DOE staff on the Sprint Initiative. If you are interested in discussing these developments, Gibson Dunn’s lawyers are available to assist with any questions you may have.
Commodity Futures Trading Commission (CFTC or “Commission”) Acting Chairman Caroline D. Pham announced a new enforcement initiative as part of her keynote address at FIA BOCA50 on March 11, 2025 (published on March 13, 2025). The new 30-day compliance and remediation initiative or enforcement “sprint” (the “Sprint Initiative”) focuses on non-compliance matters that do not involve fraud or manipulation (such as recordkeeping, reporting or other compliance violations). Although a careful analysis of the particular circumstances of each matter will be necessary, the Sprint Initiative provides a significant opportunity for market participants that are currently under investigation, subject to an enforcement action, or engaged in CFTC Division of Enforcement (DOE) inquiries—as well as firms without open inquiries who may provide a new self-report of a violation—to participate and potentially quickly settle such matters with the Commission.
Acting Chairman Pham set forth the parameters to the Sprint Initiative in her address, noting that firms with relevant matters or issues may approach DOE staff within the next two weeks to provide remediation updates (such as a presentation, white paper, or other submission) and “reasonable” settlement offers. With respect to settlement offers, Acting Chairman Pham remarked that the CFTC will take a more “holistic approach” to civil monetary penalties by looking at precedent over the last 10 years, not “just the last few years” when penalties at the CFTC have been steeper than historical amounts in comparable cases. She explained that the CFTC will seek to expeditiously resolve matters in the next 30 days to conserve the CFTC’s resources and free up DOE staff to pursue fraudsters and scammers and seek recoveries for victims, whether through disgorgement, restitution, or other measures.
Her address comes within weeks of structural changes within the DOE to refocus DOE’s priorities and resources on fraud and manipulation. Additionally, on February 25, 2025, the DOE issued an Enforcement Advisory on Self-Reporting, Cooperation, and Remediation (the “February 25 Advisory”) which rescinded all previous guidance from DOE and set forth the parameters under which market participants can receive credit for self-reporting, cooperation, and remediation in connection with enforcement investigations. Settlement offers in connection with the Sprint Initiative should apply the guidance set forth in the February 25 Advisory.[1]
While financial regulators have recently been closing particular matters, time is of the essence and firms should carefully consider their circumstances and whether and how to engage with DOE staff on the Sprint Initiative. If you are interested in discussing these developments, Gibson Dunn’s lawyers are available to assist with any questions you may have.
[1] Gibson Dunn issued a client alert on March 5, 2025, detailing the contours and ramifications of the February 25 Advisory. See https://www.gibsondunn.com/cftc-issues-enforcement-advisory-regarding-impact-of-self-reporting-cooperation-and-remediation-on-potential-enforcement-actions/.
Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding the issues discussed in this update. Please contact the Gibson Dunn lawyer with whom you usually work, any member of the firm’s White Collar Defense & Investigations or Derivatives practice groups, or any of the following:
Jeffrey L. Steiner – Washington, D.C. (+1 202.887.3632, jsteiner@gibsondunn.com)
Osman Nawaz – New York (+1 212.351.3940 ,onawaz@gibsondunn.com)
David P. Burns – Washington, D.C. (+1 202.887.3786, dburns@gibsondunn.com)
Stephanie Brooker – Washington, D.C. (+1 202.887.3502, sbrooker@gibsondunn.com)
Amy Feagles – Washington, D.C. (+1 202.887.3699, afeagles@gibsondunn.com)
Adam Lapidus – New York (+1 212.351.3869, alapidus@gibsondunn.com)
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