The CFTC announced today that it had a record enforcement year.  The CFTC filed 102 enforcement actions in its fiscal year ended September 30, 2012, which is up slightly from the 99 actions it filed in fiscal year 2011.  Prior to the Dodd-Frank Act, the CFTC filed just 57 cases in fiscal year 2010.  The CFTC also opened 350 new investigations in 2012 and obtained orders imposing over $585 million in sanctions, including orders imposing more than $416 million in civil monetary penalties. 

Not surprisingly, the Dodd-Frank Act has had a profound effect on CFTC enforcement activities and it is likely that enforcement activities will continue to expand.  In fiscal year 2013, the CFTC is seeking to increase its overall budget by 49% and its enforcement budget by over 33%.  The CFTC wants to hire 48 new full time employees – an increase of over 28% in manpower – in its enforcement division.  In its request, the CFTC states that its workload will increase for a number reasons, including: 

  • new prohibitions targeting disruptive trading practices and conduct on registered entities;
  • establishment of anti-fraud and anti-manipulation authority over swaps;
  • new prohibitions against reporting false information;
  • increase in the number and types of registrants; and
  • new regulations applying to swaps and other intermediaries including those involving business conduct standards, fraud, record-keeping, reporting and trade practice;

Last year, Congress significantly cut the CFTC’s budget request.  This year, Congress passed a continuing resolution, with spending rates slightly higher than last year, to avoid the possibility of a government shutdown just before the November elections.  As a result, whether Congress provides the CFTC everything it wants will not be determined until early in 2013.  However, given the political landscape, there is a strong possibility that Congress will cut the CFTC’s budget request.