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M E M O R A N D U M

TO: Division of Enforcement Staff 

FROM: Vincent A. McGonagle 

Acting Director, Division of Enforcement 

DATE: October 29, 2020 

SUBJECT: Recognizing Cooperation, Self-Reporting, and Remediation in 

Commission Enforcement Orders 

This memorandum provides guidance to Commodity Futures Trading Commission 

(“CFTC” or “Commission”) Division of Enforcement (“Division”) staff in considering 

recommending the recognition of a respondent’s cooperation, self-reporting, and remediation in 

Commission enforcement orders. This memorandum does not change Division practice with 

respect to how the Division will evaluate self-reporting, cooperation, or remediation, or how the 

Division will consider reductions in penalties in connection with self-reporting, cooperation, or 

remediation in accordance with the self-reporting and cooperation advisories issued by the 

Division (“Advisories)”1 and set forth in the Enforcement Manual.2 Rather, this memorandum is 

intended to provide transparency and clarity regarding when and how the Division will 

recommend that these assessments be reflected and recognized in the Commission enforcement 

 

1 See Enforcement Advisory: Cooperation Factors in Enforcement Division Sanction Recommendations for 

Individuals, 

https://www.cftc.gov/sites/default/files/idc/groups/public/@lrenforcementactions/documents/legalpleading/enfadvis

oryindividuals011917.pdf; Enforcement Advisory: Cooperation Factors in Enforcement Division Sanction 

Recommendations for Companies, 

https://www.cftc.gov/sites/default/files/idc/groups/public/@lrenforcementactions/documents/legalpleading/enfadvis

orycompanies011917.pdf; Enforcement Advisory: Updated Advisory on Self Reporting and Full Cooperation, 

https://www.cftc.gov/sites/default/files/idc/groups/public/@lrenforcementactions/documents/legalpleading/enfadvis

oryselfreporting0917.pdf.

2 See Commodity Futures Trading Commission, Enforcement Manual (2020), 

https://www.cftc.gov/LawRegulation/Enforcement/EnforcementManual.pdf. 

COMMODITY FUTURES TRADING COMMISSION

Three Lafayette Centre

1155 21st Street, N.W., Washington, DC 20581

Telephone: (202) 418-5000

Facsimile: (202) 418-5523

www.cftc.gov

Division of

Enforcement
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orders.3 This guidance will be set forth in the Enforcement Manual, and it will be binding on 

Division staff.4

As part of its evaluation of appropriate sanctions to recommend in an enforcement action, 

the Division assesses whether a respondent5 self-reported the misconduct, cooperated during the 

course of the investigation, or engaged in substantial remediation to address the misconduct and 

develop or strengthen related internal controls.6

 In certain circumstances outlined in the 

Division’s Advisories, which are incorporated in the Enforcement Manual, self-reporting, 

cooperation, and/or remediation may result in recognition in a Commission enforcement order 

and a reduction in the penalty imposed. 

This memorandum outlines how, and in what circumstances, Division staff will 

recommend recognizing self-reporting, cooperation, and remediation in Commission 

enforcement orders.

1. No self-reporting, cooperation, or remediation: Where a respondent has not 

self-reported, cooperated with a Division’s investigation, or remediated in accordance with the 

Advisories, the Division will not recommend that the Commission’s enforcement order publicly 

recognize self-reporting, cooperation, or remediation. The fact that the Division does not 

recommend recognition of cooperation does not mean that the respondent was uncooperative or 

obstructive. Rather, it merely indicates that the respondent did not cooperate in a manner that 

materially advanced the Division’s investigation or otherwise met the factors set out in the 

Advisories. 

2. No self-reporting, but cognizable cooperation and/or remediation that 

warrant recognition but not a recommended reduction in penalty: At times, the Division 

will recommend that the Commission recognize a non-self-reporting respondent’s cooperation or 

remediation in the Commission enforcement order without a recommendation that the 

cooperation or remediation be reflected in the form of a reduced penalty. To constitute 

cognizable cooperation or remediation warranting this level of recognition, the respondent will 

have satisfied one or more of the factors set out in the Advisories, but the cooperation would not 

 

3 See, e.g., Chairman Heath P. Tarbert, CFTC, Statement: “Tripling Down on Transparency” (Dec. 10, 2019), 

https://www.cftc.gov/PressRoom/SpeechesTestimony/tarbertstatement121019 (“[W]e must be transparent in how 

we enforce the law. . . . Consistent with this mandate, our Division of Enforcement will soon publish an updated 

Enforcement Manual that will inform the public about a number of changes designed to increase transparency. We 

take seriously the need to inform the public about our enforcement priorities and practices.”). 

4 This guidance creates no private rights and is not enforceable in court. Division staff are required to follow the 

guidance for purposes of making cooperation recognition recommendations to the Commission; the Commission 

will continue to exercise its independent judgment and discretion as to whether such recognition is merited in any 

particular matter.

5 The Commission brings charges against “respondents” in administrative enforcement actions before the 

Commission and against “defendants” in civil enforcement actions in U.S. District Courts. For purposes of this 

memorandum, “respondent” is used as a generic descriptor for a person charged.

6 See Enforcement Manual § 6.8.1 (Penalty Guidance); id. § 7 (Consideration of Self-Reporting, Cooperation, and 

Remediation).
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have materially assisted the Division’s investigation in the manner required to warrant a 

recommended reduction in penalty.7

 It will be insufficient to warrant recognition in this context 

if the respondent has merely done what is required by law. In this context, the Division will 

recommend the following language be included in the summary of the Commission enforcement 

order, with cooperation or remediation being recognized as appropriate to the particular matter: 

In accepting Respondent’s offer, the Commission recognizes the cooperation 

of [name of Respondent] with the Division of Enforcement’s investigation of 

this matter. The Commission also acknowledges Respondent’s 

representations concerning its remediation in connection with this matter.

The Division will also recommend that the Commission enforcement order describe the 

particular acts of cooperation and/or remediation that merited recognition. 

3. No self-reporting, but substantial cooperation and/or remediation resulting 

in a reduced penalty: In some investigations, a respondent will have provided a level of 

cooperation that was substantial, and that materially advanced the Division’s investigation in 

accordance with the Advisories, and/or engaged in substantial remediation to address the 

misconduct and materially develop or strengthen related internal controls. In this context, the 

Division will recommend the following language be included in the summary of the order, with 

cooperation or remediation being recognized as appropriate to the particular matter: 

In accepting Respondent’s Offer, the Commission recognizes the substantial 

cooperation of [name of respondent] with the Division of Enforcement’s 

investigation of this matter. The Commission also acknowledges 

Respondent’s representations concerning its remediation in connection with 

this matter. The Commission’s recognition of Respondent’s substantial 

cooperation and appropriate remediation is further reflected in the form of a 

reduced penalty.

The Division will also recommend that the Commission enforcement order describe the 

particular acts of cooperation and/or remediation that merited recognition. 

4. Self-reporting, substantial cooperation, and remediation resulting in a 

substantially reduced penalty: Where a respondent has self-reported, substantially cooperated

in a manner that materially advanced the Division’s investigation, and remediated in accordance 

with the Advisories, the Division will recommend the most significant reduction in penalty to the 

 

7 At times, a respondent’s cooperation may be uneven, or a respondent that is not cooperative at one point in the 

investigation may be cooperative at another. These circumstances may warrant recognition of cooperation and/or 

remediation without a recommended reduction in penalty. In such circumstances, staff may seek and obtain 

approval to propose language different from that set out in this memorandum to reflect those facts. At all points, 

staff should seek to ensure the Commission enforcement order accurately reflects the necessary facts relevant to the 

cooperation analysis.
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Commission.8 In this context, the Division will recommend the following language be included 

in the summary of the Commission enforcement order: 

In accepting Respondent’s Offer, the Commission recognizes the selfreporting and substantial cooperation of [name of Respondent] in connection 

with the Division’s investigation of this matter. The Commission also 

acknowledges Respondent’s representations concerning its remediation in 

connection with this matter. The Commission’s recognition of Respondent’s 

self-reporting, substantial cooperation, and appropriate remediation is 

further reflected in the form of a substantially reduced penalty. 

The Division will also recommend that the Commission enforcement order describe the 

particular acts of the self-report, cooperation, and remediation that merited recognition. 

 * * * 

The Division will continue to evaluate and consider issues relating to self-reporting, 

cooperation, and remediation as they develop through Commission matters. Should staff identify 

issues in their own cases, those issues should be raised with the appropriate Deputy Director and 

the Office of Chief Counsel. In addition, staff should raise any questions about how this 

guidance applies to any particular matter with the appropriate Deputy Director and the Office of 

Chief Counsel. 

 

8 As set forth in the advisories, in extraordinary circumstances, a proposed respondent’s cooperation may result in a 

recommendation that no penalty be imposed by the Commission, although other sanctions and monetary relief may 

be ordered or enforcement action not be taken. See Letter from James M. McDonald, Director, Division of 

Enforcement, CFTC to Andrew Stemmer, Deutsche Bank Securities Inc. (Nov. 8, 2018), 

https://www.cftc.gov/sites/default/files/2018-11/enf_DeutscheBankDeclinationLetter110818.pdf.