Strategic Goal Two–Protecting Market Users and the Public
Table Of Contents
While our country reaps the rewards of an explosive futures industry, there is an accompanying increased risk of fraud for market users and the public. The trend toward electronic trading platforms as well as the expanding complexity of trading instruments has challenged the Commission to reconfigure its ability to identify, investigate, and prosecute all parties involved in violating applicable laws and regulations. Typically, the Commission has over 150 investigations open at any particular time, however in FY 2009; an unprecedented 251 investigations were opened. If evidence of criminal activity is found, matters are referred to state or Federal authorities for criminal prosecution.
Over the years, the Commission has prosecuted a number of cases involving manipulations or attempted manipulations of commodity prices. The Sumitomo copper case and the Hunt brothers silver case are well-known examples manipulation. Since 2001, the Commission charged over 80 companies and individuals and assessed approximately $458 million in penalties for attempting to manipulate, or for manipulating energy markets. A variety of administrative sanctions are available to the Commission, such as bans on futures trading, civil monetary penalties, and restitution orders. The Commission may also seek Federal court injunctions, asset freezes, and orders to disgorge ill-gotten gains.
In FY 2011, the Commission requests $50.2 million to fund its efforts to reach the following outcomes of Strategic Goal Two:
- Violations of Federal commodities laws are detected and prevented—with an FY 2011 performance goal of increasing the probability of violators being detected and sanctioned.
- Commodity professionals meet high standards—with an FY 2011 performance goal of zero unregistered, untested, or unlicensed commodity professionals, unless they qualify for exemption from registration.
- Customer complaints against persons or firms registered under the Act are handled effectively and expeditiously—with an FY 2011 performance goal of resolving: voluntary proceedings customer complaints within one year from the date filed; summary and formal proceedings customer complaints within one year and six months from the date filed; and resolving appeals within six months from the date filed.
Breakout of Goal Two Request by Outcome
| Goal Two Outcomes | FY 2010 | FY 2011 | Change | |||
|---|---|---|---|---|---|---|
| Budget Request |
FTE | Budget Request |
FTE | Budget Request |
FTE | |
| 2.1 Violations of Federal commodities laws are detected and prevented. | $27,540 | 103 | $36,166 | 122 | $8,626 | 19 |
| 2.2 Commodities professionals meet high standards. | 7,633 | 29 | 9,002 | 31 | 1,369 | 2 |
| 2.3 Customer complaints against persons or firms falling within the jurisdiction of the Commodity Exchange Act are handled effectively and expeditiously. | 4,502 | 18 | 5,045 | 18 | 543 | 0 |
| Total Goal Two | $39,675 | 150 | $50,213 | 171 | $10,538 | 21 |