Introduction to Strategic Goal Two

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.

Over the years, the Commission has taken action in a number of cases involving manipulation or attempted manipulation of commodity prices. A variety of administrative sanctions, such as bans on futures trading, civil monetary penalties, and restitution orders, are available to the Commission. The Commission may also seek Federal court injunctions, asset freezes, and orders to disgorge ill-gotten gains.

Performance Results for Goal Two

An increasing segment of the population has money at risk in the futures markets, either directly or indirectly through pension funds, or ownership of shares in publicly held companies that participate in the markets.

Commission staff work to protect market users and the public by promoting compliance with, and deterring violations of, the CEA and Commission regulations. The Division of Enforcement (DOE) investigates potential misconduct, brings administrative and civil injunctive enforcement actions to prosecute such misconduct, seeks sanctions against wrongdoers, and publicly reports the outcome of those enforcement actions. The majority of the work in this area involves investigating and prosecuting manipulation, attempted manipulation, and fraud. The Commission’s enforcement actions send a message to industry professionals and participants about the kinds of conduct that will not be tolerated.

• Enforcement Investigation and Litigation
  
  In FY 2009, the Commission filed 50 enforcement actions and DOE staff opened 251 investigations of potential violations of the Act and Commission regulations. Through these and existing cases previously filed by the Commission, monetary penalties imposed during FY 2009 included more than $183 million in restitution and disgorgement, and $97 million in civil monetary penalties.
  
  Energy markets and the financial downturn have resulted in increased investigative and litigation activity. In FY 2008, the Commission made an unprecedented announcement that it would conduct a nationwide crude oil investigation into practices surrounding the purchase, transportation, storage, and trading of crude oil and related derivative contracts. This investigation continues and has been extremely resource intensive. The financial downturn has revealed a number of fraudulent schemes, including Ponzi schemes that could stay afloat only during periods of rising asset values. DOE staff have been actively investigating and prosecuting these schemes. The increased DOE activity to address potential energy market misconduct and ongoing fraud has created a challenge for DOE to ensure it effectively and efficiently investigates potential violations, including staff-intensive manipulation investigations. During FY 2009, unprecedented market activity caused the DOE to shift resources to investigations. DOE continues to perform at a high level while striving to meet its goals.

The following table summarizes the FY 2009 investment and overall performance results for Strategic Goal Two. In addition, FY 2009 performance results are compared against the FY 2009 targets and FY 2008 actual results.

< Previous Page | Table Of Contents | Next Page >