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Introduction to Strategic Goal Two

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The explosive growth in the futures industry provides many benefits to the U.S. economy, but the risk of fraud and manipulation is always present. The trend toward electronic trading platforms and the expanding complexity of trading instruments have challenged the Commission to reconfigure its ability to identify, investigate, and take action against parties involved in violating applicable laws and regulations. If evidence of criminal activity is found, matters are referred to state or Federal authorities for criminal prosecution.

MARKET PROTECTION

STRATEGIC GOAL TWO

Protect market users
and the public.

Photo showing stock exchange in action.
FY 2010 Investment FY 2010 Performance Results
  FY 2010
Actual
Change (+/-) from
FY 2009
Targets: Exceeded Met Not Met Results Not
Demonstrated
Cost: $39.3 Million +$5.6 Million Results: 2 7 3 0
Staffing: 140 FTE +26 FTE   Total Number of Results: 12


Goal Two Summary of Performance

The table below provides a summary of selected performance measures to demonstrate the Commission’s performance towards protecting market users and the public. For a detailed analysis of all performance measures, please refer to the Performance Section of this report.

Performance Summary
Outcome Objective 2.1 Violations of Federal commodities laws are detected and prevented.
Performance Measures FY 2010
Target
FY 2010
Actual
FY 2010
Met or
Not Met
Performance Trends
FY 2006 – FY 2010
Comment
2.1.1 Number of enforcement investigations opened during the fiscal year. 195 419 Met
Performance Trends
  FY
2006
FY
2007
FY
2008
FY
2009
FY
2010
Targets 100 85 135 142 195
Results 123 99 215 251 419
The number of investigations opened has risen sharply due to a combination of factors including the clarification of the Commission’s authority over off-exchange traded forex, cooperative enforcement efforts, and the exposure of Ponzi schemes due to the financial downturn.
2.1.3 Percentage of enforcement cases closed during the fiscal year in which the Commission obtained sanctions (e.g., civil monetary penalties, restitution and disgorgement, cease and desist orders, permanent injunctions, trading bans, and registration restrictions.) 98% 100% Met
Performance Trends
  FY
2006
FY
2007
FY
2008
FY
2009
FY
2010
Targets 100% 95% 98% 98% 98%
Results 100% 98% 97% 98% 100%
Enforcement views this as an important metric in protecting market users by deterring future violations.
Outcome Objective 2.3 Customer complaints against persons or firms registered under the CEA are handled effectively and expeditiously.
2.3.1(a) Percentage of filed complaints resolved within one year of the filing date for voluntary proceedings. 90% 71% Not Met
Performance Trends
  FY
2006
FY
2007
FY
2008
FY
2009
FY
2010
Targets 50% 50% 100% 100% 90%
Results 71% 100% 67% 83% 71%
Normally, voluntary cases tend to take less time because of the non-appealable and informal nature of the proceedings. The cases that exceeded one year in FY 2010 included three related cases that consisted of uncooperative and non-responsive respondents.
2.3.1(b) Percentage of filed complaints resolved within one year and six months of the filing date for summary proceedings. 90% 77% Not Met
Performance Trends
  FY
2006
FY
2007
FY
2008
FY
2009
FY
2010
Targets 50% 50% 60% 60% 90%
Results 66% 50% 57% 80% 77%
Although the Office of Proceedings undertook a number of actions to improve the speed of resolution, including resolving deficiencies more quickly during the complaint phase and allowing electronic filing of documents, the factors affecting this outcome can vary from case to case. Often external factors, including complaint deficiencies, requests for extension of time, and discovery issues, may impact the ability to resolve the complaint in a speedy manner.
2.3.1(c) Percentage of filed complaints resolved within one year and six months of the filing date for formal proceedings. 95% 75% Not Met
Performance Trends
  FY
2006
FY
2007
FY
2008
FY
2009
FY
2010
Targets 50% 50% 90% 90% 95%
Results 78% 90% 73% 93% 75%
All of these cases were resolved within one year and six months, except two cases that took over two years to resolve. One case involved the filing of 15 related cases that were eventually consolidated and assigned to one judge. This case was stayed by the Commission for approximately seven months because of the numerous filings submitted by the attorneys regarding how the cases should be assigned and adjudicated. The second case encountered several delays because of events not under the judge’s control and procedural complexities.

 

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