CFTC Approves Policy Statement on Criminal Enforcement Referrals

The Commodity Futures Trading Commission (CFTC) has approved a policy statement detailing its approach to handling criminally liable regulatory offenses pursuant to Executive Order 14294, titled "Fighting Overcriminalization in Federal Regulations." Under the newly approved policy statement, the Commission will collaborate with the Attorney General to submit a formal report to the Director of the Office of Management and Budget (OMB). This report will encompass a comprehensive list of all criminal regulatory offenses enforceable by either the CFTC or the Department of Justice (DOJ). Additionally, the report will specify the range of potential criminal penalties for each regulatory offense along with the applicable mens rea, or state of mind, standard required for a violation. The policy statement establishes the regulatory framework that the CFTC, including its Division of Enforcement, will follow when evaluating whether to refer potential criminal violations to the DOJ for prosecution. The framework will be published in the Federal Register. Previously, the Division of Enforcement had released a staff advisory incorporating the framework because a majority vote of the Commission had not yet authorized publication. With the Commission's formal approval, that earlier advisory has now been officially withdrawn.