As a general matter, the CFTC determines the size of civil monetary penalties on a per violation basis, up to triple the monetary gain to the individual or company.  The CEA and CFTC regulations also establish a maximum penalty amount “per violation.”  That said, notwithstanding the maximum penalty amount per violation, the CFTC’s Division of Enforcement (Division) exercises considerable discretion to determine the number of violations for a given matter, so publishing the maximum penalty “per violation” provides only limited insight into the potential exposure that could result from a specific fact pattern. 

The Division has published guidance outlining factors that it considers when assessing the civil monetary penalty for a given matter.  The factors involve four general categories: (1) the gravity of the violation (e.g., the nature, duration, and degree of the violation); (2) the presence of mitigating or aggravating circumstances (e.g., history of violations, pre-existing compliance program, and post-violation conduct such as concealment of a violation or remedial efforts to address the violation); and (3) other considerations (e.g., remedies from analogous cases and remedies imposed a parallel matter brought by the criminal authorities, other regulatory entities, or self-regulatory organizations).  As a general matter, the Division applies these factors in a qualitative manner rather than a rigid formulaic calculation.  For a more in depth discussion of the Division’s consideration of civil monetary penalties, click here for a copy of Willkie’s client memorandum on this topic.       

The tables below provide the maximum penalty amounts “per violation.”     

**For the tables below, a “registered entity” is one of the following: designated contract market, derivatives clearing organization, swap execution facility, or swap data repository.

For Non-Manipulation or Non-Attempted Manipulation Violations

U.S. Code

Relevant Entity

Penalty per Violation occurring 10/23/2012 through 11/01/2015

Penalty per Violation occurring 11/02/2015 through Present

Penalty Imposed VIA CFTC Administrative Action

7 U.S.C. 13a

CEA Section 6b

Any person that is a “registered entity” ** or any of its directors, officers or employees

$700,000

$937,161

7 U.S.C. 9

CEA Section 6(c)

Any person that is not a “registered entity” **

$140,000

$170,129

Penalty Imposed via Federal District Court

7 U.S.C. 13a-1

CEA Section 6c

Any person

$140,000

$187,432

 

For Manipulation or Attempted Manipulation Violations

U.S. Code

Relevant Entity

Penalty per Violation occurring 10/23/2012 through 11/01/2015

Penalty per Violation occurring 11/02/2015 through Present

Penalty Imposed VIA CFTC Administrative Action

7 U.S.C. 13a

CEA Section 6b

Any person that is a “registered entity” ** or any of its directors, officers or employees

$1,025,000

$1,227,202

7 U.S.C. 9

CEA Section 6(c)

Any person that is not a “registered entity” **

$1,025,000

$1,227,202

Penalty Imposed via Federal District Court

7 U.S.C. 13a-1

CEA Section 6c

Any person

$1,025,000

$1,227,202

 

 

 


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