Getting a phone call from someone’s compliance or general counsel’s office acknowledging some technical violation of the rules is instantly one of the best days in any regulator’s year. A fine, however modest, can be assessed, indicating one’s effectiveness, without recourse to a tedious investigation, unpleasant negotiations with lawyers who are quite frankly better than you or having to convince judge or jury of the justness of your cause, however thin the evidence. Even FINRA manages to not screw it up (usually), and everyone’s very happy to look like their doing something without actually doing anything.
This is especially true of the Commodity Futures Trading Commission which, even by generally meagre standards of U.S. regulatory funding, is a pathetic pauper. Getting to trumpet getting tough on Goldman Sachs to the tune of $1 million is a godsend for an agency as broke as the CFTC. Anything more ambitious is going to require some help.
The Commodity Futures Trading Commission during the 2019 fiscal year filed a record 16 enforcement actions alongside related criminal charges, the agency said this week in its annual enforcement report…. The agency has strengthened its relationship with the U.S. Justice Department, sharing information on cases in which it spots potential criminal activity…. The director of the agency’s enforcement division, James McDonald—himself a former federal prosecutor—has highlighted the benefits of the increased coordination for both agencies. The CFTC’s specialized expertise and deep knowledge of market data enable it to identify potential criminal conduct that others wouldn’t otherwise catch, he told attendees of a legal conference in New York in September.
And then leave the real work to those with the money to pursue it.
CFTC Relying More Heavily on Coordination with Criminal Prosecutors [WSJ]
CFTC Fines Goldman Sachs $1 Million for Failing to Record Calls [WSJ]
Bank Regulator Fines Citigroup’s U.K. Operations $56.6 Million for Regulatory Failings [WSJ]