Practice Alert: CFTC will investigate and prosecute FCPA violations
Thursday, March 7, 2019 at 8:28AM
Richard L. Cassin in Brian Benczkowski, Commodities Exchange Act, Commodities Futures Trading Commission, Cooperation, Declinations, Enforcement Policy

The Commodity Futures Trading Commission (CFTC) said Wednesday it will work alongside of the DOJ and SEC to investigate foreign bribery and prosecute overseas corruption offenses.

In a March 6 Enforcement Advisory (pdf), the CFTC's Division of Enforcement said commodities companies that self report violations of the Commodity Exchange Act  involving foreign corrupt practices could receive declinations.

In deciding whether to impose any civil penalties, the CTFC said it will consider "aggravating circumstances involving the nature of the offender or the seriousness of the offense."

The CFTC will evaluate executive or senior level management involvement, the pervasiveness of the misconduct within the company, and whether the company or individual previously engaged in similar misconduct, among other things.

The CFTC already has open investigations into alleged foreign bribery, according the agency's enforcement chief, James McDonald.

McDonald announced the new enforcement policy during a speech Wednesday to the ABA's National Institute on White Collar Crime in New Orleans.

He said the CFTC may investigate bribes to win business trading swaps and derivatives contracts, for example, and cases where bribes are used to manipulate benchmark interest rates.

Traditionally the FCPA has been enforced exclusively by the DOJ for criminal offenses and the SEC for civil offenses.

The CFTC is an independent federal agency that regulates the U.S. derivatives markets, including futures, options, and swaps. The agency has a formal whistleblower program. Since issuing its first award in 2014, it has has awarded more than $85 million to whistleblowers, including $2 million earlier this week.

In a statement from the DOJ about Wednesday's CTFC Enforcement Advisory, Assistant AG Brian Benczkowski said the new policy "will make clear to companies the significant benefits of voluntarily self-disclosing misconduct, fully cooperating with the government’s investigation, and remediating the misconduct."

"We look forward to working in parallel with the CFTC in cases involving foreign corrupt practices, as well as others,” Benczkowski said.

In late 2017, the DOJ adopted an FCPA Corporate Enforcement Policy and incorporated (pdf) it into the U.S. Attorneys’ Manual.

The DOJ policy says companies with FCPA violations can earn declinations through voluntary self disclosure, full cooperation, and timely and appropriate remediation.

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Richard L. Cassin is editor at large of the FCPA Blog.

Article originally appeared on The FCPA Blog (http://www.fcpablog.com/).
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