The Commodity Futures Trading Commission has been determining fines in the same way since people were still debating the relative merits of Excel and Lotus 1-2-3. (That’s since 1994, for those of you who’ve never heard of the latter.) Which is to say that it’s been pulling numbers out of nowhere in roughly the same way for long enough for the range of apparently baseless figures pushed across the table during negotiations to become embarrassingly large. And since it’s been letting the Justice Department do most of its work for it lately, it thought it might give the old rules a bit of a brush up, in the name of transparency.

The memo outlines several broad categories of factors to consider, such as the gravity of the violation and mitigating and aggravating circumstances. With respect to the gravity of a violation, the memo directs staff lawyers to consider the number, duration and degree of the infraction, among other factors.

Mitigating or aggravating conduct could include whether a company or individual self-reported or took steps to prevent future infractions. The memo also says staff lawyers can consider factors such as the conservation of the CFTC’s resources.

But not too much transparency: The CFTC isn’t losing all of its Bart Chilton-esque jazzy ways.

The guidance doesn’t elaborate on how the agency calculates the number of violations in cases alleging market manipulation or other types of misconduct related to the derivatives and commodities markets, lawyers for the law firm Skadden, Arps, Slate, Meagher & Flom LLP said in a client message….

“The goal of this document is not that you plug the conduct into a formula and it spits out a number,” [CFTC staff enforcement director James McDonald] said.

Which is just as well, because there’s no way the CFTC could afford to build a system to make that happen.

Penalty Guidance Gives Companies More Transparency, CFTC Official Says [WSJ]

Related

CFTC Commissioner Bart Chilton Uses Public Meeting On Dodd/Frank Rulemaking To Test Out Open Mic Night Bits

In full: "Thank you Mr. Chairman. There are a couple of important events coming up that I want to share with you today. First, tonight the All-Star game will be played. Also, in just 11 days, we’ll have the two-year anniversary of the signing of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Now, some of you are asking, “How’s he going to put these two totally divergent things together?” It’ll all make sense in a minute. Really. First, how many of you have heard of Bryce Harper? He’s the youngest position player ever chosen for an All Star game and plays for what is for many of you, your hometown team, the Washington Nats. He not only has a way with the bat but he seems to have a way with words, too. A couple weeks ago, a reporter asked him what he seemed to think was a silly question, and he responded by saying, “That’s a clown question, bro.” That answer went on T-shirts. It went on late-night TV. It went viral. Now, back to Dodd-Frank. There are those who say we don’t need it. Let’s repeal it—or at least parts of it. Let’s de-fund the agencies overseeing it so they can’t enforce it. Heck, let’s just take ‘em to court if we don’t like the line-up. Let’s take our bat and ball and go home. So, here’s the question they seem to be asking: “Do we even need Dodd-Frank?” Let’s not even talk about 2008 and the financial collapse and the real reason Dodd-Frank came along in the first place. Let’s talk about how MF Global (as some would suggest) got caught trying to steal. Let’s talk about JPMorgan’s losing streak. Let’s talk about Barclays’ balk. Do we need Dodd-Frank? That’s a clown question, bro. So yes, we need rules. We need the funding to enforce them. Plenty of folks still seem to think they can get around the rules. Plenty of folks in this town seem to think we don’t need umpires. Do we? That’s a clown question, bro." That's A Clown Question, Bro [CFTC]