Commod1~ futurn Tradinl' Commi.uion 

U.S . COMMODITY FUTURES TRADING COMMISSION 

Office of Inspector General 

Three Lafayette Centre 

1155 2 1st Street, NW, Washington, DC 20581 

Telephone: (202) 418-5110 

Facsimile: (202) 418-5522 

May 2, 2017 

TO: J. Christopher Giancarlo, Acting Chairman 

Sharon Y. Bowen, Commissioner 

FROM: A. Roy Lavik, Inspector General 

SUBJECT: OIG's Investigation into a Potential Violation of I 8 U.S.C. § 208 - Acts Affecting a 

Personal Financial Interest 

Earlier this year, my Office investigated a potential violation of 18 U .S.C. § 208 and related 

regulations. Our March 30, 20 17, report of investigation (ROI) found no misconduct by the 

CFTC employee; however, we recommended that CFTC implement a system to track 

open/unanswered requests for ethics advice, and that CFTC have supervisors review their 

employees' financial disclosure forms. 

On April 21, 2017, CFTC General Counsel and Designated Agency Ethics Official Daniel 

J. Davis responded to our recommendations, conveying the sentiment of "CFTC Management." 

CFTC Management agreed to implement our first recommendation, and is already working to 

create a shared electronic database to log and track requests for ethi cs advice and guidance. We 

are pleased with this response. 

CFTC Management appreciated but did not agree to implement our second 

recommendation. Rather than having supervisors review employees' financial disclosure fonns, 

the CFTC ethics program "plans to provide in person training to all CFTC supervisors this 

calendar year and will send written guidance to all CFTC supervisors about their additional 

ethics responsibilities as set forth in 5 C.F.R. § 2638.103." 1 

We believe that CFTC Management's actions in response to our second recommendation 

constitute a good first step. We recommend that, in a year's time, CFTC management evaluate 

its planned enhanced training fo r managers and reconsider requiring supervisory review of 

1 Section 2638. 103 states: 

Every supervisor in the executive branch has a heightened personal responsibility for advancing 

government ethics. It is imperative that supervisors serve as models of ethical behavior for subordinates. 

Supervisors have a responsibility to help ensure that subordinates are aware of their ethical obligations 

under the Standards of Conduct and that subordinates know how to contact agency ethics officials. 

Supervisors are also responsible for working with agency ethics officials to help resolve conflicts of interest 

and enforce government ethics laws and regulations, including those requiring certain employees to file 

financial disclosure reports. In addition, supervisors are responsible, when requested, for assisting agency 

ethics officials in evaluating potential conflicts of interest and identifying positions subject to financial 

disclosure requirements. 
financial disclosure statements. While currently not required, it is certainly anticipated under 

section 2638.103, as well as 5 CPR § 2634.605 ("The reviewing official may request an 

intermediate review by the filer's supervisor. . .. After obtaining any intermediate review or 

determining that such review is not required, the reviewing official shall examine the report ... "). 

We believe that the continued absence of supervisory review may lead to conflicts of interest, 

both deliberate and unintended, in appearance and in fact. 

In addition to providing a management response, the Office of General Counsel (OGC) 

prepared a redacted version of the ROI for publication (in consultation with our Office). A copy 

of the redacted version of the March 30, 2017, ROI is attached. This closing memo addresses the 

management response and will conclude our investigation. 

As always, I appreciate your continuing support of my Office. 

Attachments 

Cc (with attachments): 

Daniel Davis, General Counsel 

Anthony Thompson, Executive Director 

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