Futures industry enforcement up 14% in 2010

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) announced today that its enforcement program filed 57 enforcement actions in Fiscal Year (FY) 2010 – 14 percent more than in FY 2009 and 42 percent more than in FY 2008. The Division of Enforcement’s filings involve allegations of manipulation, fraud, abuse and other violations of the Commodity Exchange Act. These 57 actions have resulted in more than $186 million in civil monetary penalties, restitution and disgorgement. Additionally, the Division of Enforcement opened 419 investigations in FY 2010 – an all-time high, which is 66 percent more than the 251 investigations opened in FY 2009.

Overview of CFTC Enforcement cases filed in FY 2010

Of the 57 actions filed during FY 2010, 15 involved commodity pool frauds and 14 involved retail foreign currency (forex) fraud.

Below is a breakdown of FY 2010 enforcement filings by category:

Manipulation, Attempted Manipulation and False Reporting: 6
Commodity Pools, Hedge Funds, Commodity Pool Operators and Commodity Trading Advisors: 15
Fraud By Futures Commission Merchants, Introducing Brokers and Their Associated Persons: 2
Forex Fraud: 14
Financial, Supervision, Compliance and Recordkeeping: 8
Trade Practice: 11
Statutory Disqualification: 1

Fighting fraud and manipulation

The Division of Enforcement continued to actively prosecute fraud and manipulation in FY 2010. The CFTC filed six complaints charging manipulation, attempted manipulation or false reporting, five more than in the previous fiscal year. The Division also saw a sharp increase in the number of trade practice violations charged, from three in FY 2009 to 11 in FY 2010.

Cooperative investigation and prosecution

The CFTC Division of Enforcement continues to actively engage in cooperative enforcement with federal and state criminal and civil authorities. During Fiscal Year 2010, more than 95 percent of the CFTC’s major injunctive fraud cases involved related criminal investigations and, to date, more than 65 percent of those investigations have resulted in criminal indictments.

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