Created with Sketch.Menu Transparency
	Contact Us Search
Search
 Main navigation

      
      About the CFTC
                          The Commission
                        Chairman & Commissioners
                        CFTC Organization
                        Advisory Committees
                        Budget & Performance
                        Privacy at the CFTC
                        Careers
                        Diversity and Inclusion at the CFTC
                        Industry Oversight
                          Industry Filings
                        Trading Organizations
                        Clearing Organizations
                        Data Repositories
                        Intermediaries
                        Market Surveillance
                        Contracts & Products
                        Rules & Rule Amendments
                        Anti-Money Laundering
                        Law & Regulation
                          Commodity Exchange Act & Regulations
                        How Rules Are Made
                        Holding Wrongdoers Accountable
                        Federal Register
                        Public Comments
                        CFTC Staff Letters
                        Office of Technology Innovation
                        Market Data & Economic Analysis
                          Data at CFTC
                        Commitments of Traders
                        Bank Participation Reports
                        Cotton On-Call
                        Financial Data for FCMS
                        Net Position Changes Data
                        Staff Reports
                        Weekly Swaps Report
                        Cleared Margin Reports
                        Office of the Chief Economist
                        Forms & Submissions
                        Learn & Protect
                          Check Registration & Disciplinary History
                        Submit a Tip
                        Reparations Program
                        RED List
                        Advisories & Articles
                        Videos
                        Publications
                        News & Events
                          Press Releases
                        Public Statements & Remarks
                        Events Carousel Rotation On
              On


News & Events
  

        
      Press Releases
                        Public Statements & Remarks
                        EventsPublic Statements & Remarks
  

        
      Chairman Rostin Behnam
                        Commissioner Kristin N. Johnson
                        Commissioner Christy Goldsmith Romero
                        Commissioner Summer K. Mersinger
                        Commissioner Caroline D. Pham Public Statements & RemarksConcurring Statement of Commissioner Caroline D. Pham Regarding Amended Complaint
            October 21, 2022
    
          
            I respectfully concur with the amendments to the CFTC’s Complaint originally filed on April 27, 2022, in the U.S. District Court for the Southern District of New York against Archegos Capital Management, LP and Patrick Halligan.[1]

This is an important CFTC enforcement action.However, I concur because I note that the SEC has recently issued an FAQ on security-based swaps that states that, pursuant to the Securities Exchange Act of 1934, as amended by the Dodd-Frank Act, a swap based on the shares of an exchange-traded fund that tracks a broad-based securities index is a security-based swap.[2]

The Commission has a fundamental responsibility to ensure the integrity of the derivatives markets and enforce the Commodity Exchange Act (CEA) against fraudulent schemes involving our markets and products.[3]Among other things, it is critical that swap counterparties have accurate information for risk management and other requirements.

Overall, this enforcement action is an appropriate exercise of the CFTC’s broad anti-fraud authority in order to reach alleged egregious misconduct constituting a fraudulent scheme in connection with swaps under the jurisdiction of the CFTC.The Commissionmust pursue justice to the fullest extent possible under the CEA, and we have the tools to do so here.

[1]  Statement of Commissioner Caroline D. Pham Regarding Charges Against Archegos Capital Management (April 28, 2022), available at https://www.cftc.gov/PressRoom/SpeechesTestimony/phamstatement042722.

[2]  Division of Trading and Markets, U.S. Securities and Exchange Commission, Frequently Asked Questions Regarding Security-Based Swaps (July 11, 2022) (“In the staff’s view, the swap based on the shares of an exchange traded fund (ETF) that tracks a broad-based securities index, such as the S&P 500, is a security-based swap.  Section 3(a)(68)(A)(ii)(II) of the [Securities] Exchange Act provides in part that a security-based swap means any agreement, contract, or transaction that is a swap as defined under section 1a of the Commodity Exchange Act and, among other things, is based on a single security . . . .  ETFs and other similar exchange-traded products register offerings of shares under the Securities Act, and list such shares for trading on national securities exchanges.  Accordingly, a swap based on the shares of an ETF or another similar exchange-traded product meets the definition of security-based swap because it is based on a single security . . . .”) (citations omitted), available at https://www.sec.gov/files/faqs-security-based-swaps.pdf; cf., e.g., Jones Day, Don't Call it a Swap: The CFTC Asserts Jurisdiction Where it Shouldn't (July 2022) (“The CFTC’s assertions in its recent Archegos actions have upset the long-settled understanding of many market participants that Broad-based Index ETF [total return swaps] are [security-based swaps].”), available at https://www.jonesday.com/en/insights/2022/07/the-cftc-asserts-jurisdiction-where-it-shouldnt.

[3]  See Prohibition on the Employment, or Attempted Employment, of Manipulative and Deceptive Devices and Prohibition on Price Manipulation, 76 Fed. Reg. 41398, 41401 (July 14, 2011) (“The Commission intends to interpret and apply CEA section 6(c)(1) and final Rule 180.1 not technically and restrictively, but flexibly to effectuate its remedial purposes.’’) (internal quotations omitted) (citing SEC v. Zandford, 535 U.S. 813, 819 (2002), and R&W Technical Servs., Ltd. v. CFTC, 205 F.3d 165, 173 (5th Cir. 2000)).
      
    
          -CFTC- News & Events
  

        
      Press Releases
                        Public Statements & Remarks
                        Events Public Statements & Remarks
  

        
      Chairman Rostin Behnam
                        Commissioner Kristin N. Johnson
                        Commissioner Christy Goldsmith Romero
                        Commissioner Summer K. Mersinger
                        Commissioner Caroline D. Pham


Resources

CFTC Regulations
	Commodity Exchange Act
	Privacy Policy
	Web Policy
	FOIA
	EEO Statement
	No Fear Act
	Accessibility Statement
	Procurement
	USA.gov
	Glossary

Actions

Search Public Comments
	Submit Tips & Complaints
	Search Industry FilingsWhistleblower.gov
	Office of Technology InnovationInspector GeneralSitemap

HomeCFTC Headquarters
Three Lafayette Centre
1155 21st Street, NW
Washington, DC 20581
202.418.5000