Remarks of CFTC Director of Enforcement James M. McDonald at the 41st Annual Conference of the Future Industry Association’s Law & Compliance Division Conference
May 8, 2019
Over the last few years, under Chairman Giancarlo’s leadership, the CFTC has implemented a number of measures to make our regulations simpler, more accessible, and more transparent. These reforms have been policy neutral—not designed to advance one particular viewpoint over another. Instead, these efforts were rooted in common sense—designed to make us better regulators, which in turn would lead to more efficient markets and greater economic growth.
In this vein, the Division of Enforcement today announces and makes public its Enforcement Manual. The Enforcement Manual serves as a general reference for Division Staff in the investigation and litigation of potential violations of the Commodity Exchange Act (CEA) and Commission Regulations (Regulations). It lays out the practices and procedures that guide our work.
The Manual creates no private rights. And it’s not enforceable in court. But it is important, we believe, to have clear policies to promote consistency across our Division, which spans multiple offices and teams. Consistency and transparency as to these procedures should promote fairness, increase predictability, and enhance respect for the rule of law.
The decision to create and publish the Enforcement Manual was rooted in the common sense notion that our policies and procedures should be readily accessible to those affected by them. We’ve come a long way since the time of the old emperors, who, it is said, posted edicts high on the columns so that they would be harder to see and thus easier to transgress. We in the United States chose a different course—opting instead to follow the likes of Thomas Paine, who famously wrote that “in America the law is king.” We pursued that path based in part on a view that the law should be predictable, transparent, and fair. Of course our Manual is not binding law, and—to say it again—creates no private rights. Still, we seek to adhere to those same principles in our daily work. And we publish our Enforcement Manual in that spirit.
The Manual is divided into eleven different sections, each addressing a different subject matter—ranging from how we generate and process leads, to how we investigate and litigate cases, to how we evaluate applicable privileges and issues of confidentiality. In addition, the Manual discusses the Division’s Wells process, sets forth how we work in parallel with other civil and criminal agencies, lays out the various aspects of the Division’s self-reporting and cooperation program as well as the various tools we can use to recognize cooperation, and provides an overview of the Commission’s Whistleblower program, among other things.
Going forward, we expect this Manual to be a living document. We in the Division regularly evaluate and refine our thinking about our policies and procedures, and whether revisions or additions are warranted. I expect, as we develop new policies and procedures, that in most cases we would incorporate them into the Enforcement Manual.
In drafting the Manual, we sought to provide an effective overview of the policies and procedures that guide us in our daily work. But to distill some of the core components of our program into a single, accessible document required significant critical analysis and judgment.
We had a team that was up to the task. This project was led by the Division of Enforcement’s Office of Chief Counsel, and in particular by Gretchen Lowe, the Chief Counsel, as well as William Janulis, Edward Riccobene, and Matthew Rowland. My compliments and appreciation to Gretchen and her team.
The Enforcement Manual is available on our website, cftc.gov. I encourage you all to read it.