Reed Smith Client Alerts

Key takeaways

  • CFTC’s Division of Enforcement (the Division) has issued guidelines (the Advisory) indicating it will no longer accept neither-admit-nor-deny answers as the default settlement option
  • The Division will recalibrate penalties on a case-by-case basis to combat recidivism and increase deterrence
  • The Advisory lays out guidelines for the imposition of monitors in the severest of cases and consultants for less severe cases requiring oversight

On October 17, 2023, the Commodity Futures Trading Commission’s (CFTC) Division of Enforcement (the Division) issued an Advisory Regarding Penalties, Monitors and Consultants, and Admissions in CFTC Enforcement Actions (the Advisory) that outlines a new approach by the Division in requiring admissions of wrongdoing, imposing monitors or consultants, and assessing penalties.1 The Advisory reflects the Division’s efforts to enhance its enforcement program and hold wrongdoers accountable, while also encouraging cooperation and remediation.


Perhaps most important, the Division will no longer accept the neither-admit-nor-deny settlement policy as the default option, but rather will discuss with respondents whether admissions are appropriate on a case-by-case basis. The Division will consider the facts and circumstances of each matter, as well as a non-exhaustive list of factors, to determine whether admissions should be required. The factors include:

  • Whether the respondent is also entering into a parallel criminal resolution where the respondent admits the underlying misconduct
  • Whether the evidence conclusively establishes the misconduct, e.g., through the respondent's own admission or documentary evidence
  • Whether and to what extent a respondent seeks cooperation credit
  • Whether the offense is a strict liability offense in clear violation of the law. The Division explained that the key question in such cases is whether activities that violated the law occurred, and that there is no need to assess the respondent’s state of mind.2