COMMODITY FUTURES TRADING COMMISSION 

Three Lafayette Centre 

1155 21st Street, NW, Washington, DC 20581 

Telephone: (202) 418-5320 

www.cftc.gov 

Division of Enforcement 

ENFORCEMENT ADVISORY 

ADVISORY REGARDING PENALTIES, MONITORS AND CONSULTANTS, AND 

ADMISSIONS IN CFTC ENFORCEMENT ACTIONS 

This enforcement advisory (“Advisory”) provides guidance to Division of Enforcement 

(“Division”) staff relating to the assessment of whether, in a proposed resolution of an 

enforcement action: (1) the proposed civil monetary penalty (“CMP”) is sufficient to achieve 

general and specific deterrence, particularly for a recidivist respondent;1 (2) imposition of a 

corporate compliance monitor or consultant is appropriate, and if so, what the duties and 

responsibilities of monitors and consultants should be; and (3) admissions are appropriate based 

on the facts and circumstances of the particular enforcement action.

2 These considerations 

reflect the Division’s focus on achieving accountability and minimizing future misconduct when 

negotiating a proposed resolution that it may recommend to the Commission. These 

considerations apply to proposed resolutions of federal court and administrative enforcement 

actions.3 

1 General deterrence refers to the effect of potential punishment on the general public, while specific 

deterrence refers to the effect on a specific offender. 

For ease of reference, the term “respondent” also includes a defendant in a federal court action.

2 This Advisory supplements earlier advisories and guidance, including in the Division’s Enforcement 

Manual, addressing the manner in which the Division would assess whether respondents in Division investigations 

self-reported their misconduct, fully cooperated with the Division’s investigation, and sufficiently remediated the 

misconduct, and further examining when respondents should receive a reduction in their CMPs resulting from their 

self-reporting, cooperation and remediation. See Self-Reporting, Cooperation, and Remediation, available at 

https://www.cftc.gov/About/CFTCOrganization/SelfReportingCooperationandRemediation (listing advisories and 

guidance); Enforcement Manual, available at https://www.cftc.gov/media/1966. These previously announced 

policies remain in effect and continue to constitute essential components of the Division’s enforcement efforts. See, 

e.g., In re Tanius Technology, LLC, CFTC No. 22-34 (Sept. 26, 2022), available at 

https://www.cftc.gov/PressRoom/PressReleases/8595-22 (recognizing self-reporting, cooperation, and appropriate 

remediation in the form of a substantially reduced penalty). 

3 This Advisory is a statement of Division policy and direction to Division staff. The Advisory is not a 

statement of Commission policy. 

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I. Penalties: Achieving Deterrence 

Per current Division policies, when assessing the appropriate CMP to recommend to the 

Commission in a particular matter, the Division accounts for numerous factors, including the 

need to achieve general and specific deterrence.4 If penalties are not sufficiently high, entities 

may choose to continue to behave unlawfully, viewing penalties as a cost of doing business; and 

individuals may view the potential rewards of misconduct as outweighing the potential risks. 

Higher penalties may, in particular, empower compliance professionals at entities to make the 

business case to senior management for the resources they need to do their jobs effectively. 

Further, without sufficient penalties, entities may be less inclined to cooperate with the Division, 

believing that any penalty ultimately imposed will be acceptable and bearable. 

Going forward, the Division is recalibrating how it is assessing proposed CMPs to ensure 

that the CMPs are at the level necessary to achieve general and specific deterrence, which may 

result in the Division recommending higher penalties in resolutions than may have been imposed 

in similar cases previously. Particularly where the Division observes multiple similarly situated 

respondents violating similar laws in similar ways over time, the Division will assess whether 

penalties higher than those imposed previously are necessary to achieve sufficient general 

deterrence. 

These considerations are especially salient in cases involving recidivism—i.e., repeated 

violations of law by the same person, for example where the proposed respondent has been the 

subject of previous Commission actions.

5 In determining whether a person is a recidivist, the 

Division will consider various factors, including: 

• The overlapping nature of the prior and current Commission actions (for example, 

do they involve the same or similar kinds or categories of violations). The 

Division will look to whether the violations resulted from the same root cause or 

involved the same general subject matter. 

• The time between offenses. More recent conduct is likely to be given more 

weight in determining whether an entity is a recidivist. 

• Whether overlapping management was involved. 

4 See, e.g., Enforcement Manual, supra n.2, at 30 (when assessing penalties, “staff will be guided by the 

overarching consideration of ensuring the proposed penalty achieves the dual goals of specific and general 

deterrence”).

5 Herein, “person” refers to natural persons or entities. 

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• The pervasiveness of the new misconduct. De minimis new misconduct that is 

quickly identified and remediated is less likely to result in a recidivism finding 

than pervasive new misconduct that persists over time. 

• The robustness and effectiveness of remediation, if any, taken and maintained 

since the prior resolution. Inadequate remediation reflects an insufficient 

commitment to addressing prior misconduct and minimizing the risk of 

recurrence. 

Per current Division policies, the Division considers recidivism as an aggravating factor 

that can increase the amount of a CMP imposed in a resolution.6 Those policies also make 

recidivism relevant to assessing a resolving respondent’s entitlement to cooperation credit.7 In 

recent years, the Division has observed recidivism by numerous categories of respondents, from 

individual offenders to large institutions which have had a number of significant legal violations 

in a limited period of time, reflecting an insufficient institutional commitment to taking steps 

necessary to ensure compliance with the law. In connection with the Division’s focus on 

ensuring that proposed settlements will obtain appropriate and effective deterrence, the Division 

will heavily factor recidivism when determining appropriate penalties to recommend to the 

Commission. 

For recidivist entities, in addition to escalating penalties, the Division will be inclined to 

recommend that a Monitor or Consultant be imposed as part of any resolution, applying the 

criteria set forth below in Section II of this Advisory. 

II. Monitors and Consultants 

The Division has long included undertakings involving both Monitors and Consultants to 

achieve an important goal—ensuring the actual and effective remediation of a respondent’s 

conduct.8 

6 See Enforcement Manual, supra n.2, at 31; Enforcement Advisory: Cooperation Factors in Enforcement 

Division Sanction Recommendations for Companies (“Cooperation Factors for Companies”) and Enforcement 

Advisory: Cooperation Factors in Enforcement Division Sanction Recommendations for Individuals (“Cooperation 

Factors for Individuals”), available at 

https://www.cftc.gov/About/CFTCOrganization/SelfReportingCooperationandRemediation. 

7 Id. 

8 See, e.g., In re Goldman Sachs & Co. LLC, CFTC No. 23-59 (Sept. 29, 2023), available at CFTC Orders 

Three Financial Institutions to Pay Over $50 Million for Swap Reporting Failures and Other Violations; In re The 

Bank of Nova Scotia, CFTC No. 20-26 (Aug. 19, 2020), available at CFTC Orders The Bank of Nova Scotia to Pay 

$127.4 Million for Spoofing, False Statements, Compliance and Supervision Violations. 

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The Division intends to continue to recommend the use of Monitors and Consultants as 

appropriate. To provide guidance to staff, the Division outlines below the roles and 

responsibilities of Monitors and Consultants, among others:

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The selection of the specific Monitor will need to be approved by the Division. 

Responsibilities of the Monitor will include: 

(1) testing the sufficiency of the entity’s policies, procedures, and controls to identify, 

address, and prevent future misconduct like that described in the order; 

(2) drafting specific recommendations to address issues identified during testing; and 

(3) testing the sufficiency of the entity’s enhancements to its policies, procedures, and 

controls to implement the Monitor’s recommendations and the effectiveness of those 

enhancements over time. 

The Monitor will submit reports to the Division (or another operating division within the 

CFTC, as appropriate) describing the remediation plan and the entity’s progress in implementing 

the recommendations. If the entity chooses not to adopt one or more of the Monitor’s 

recommendations, the entity will be required to report that fact to the Division (or the relevant 

operating division) along with its stated reasons for non-adoption, to inform the Division’s (or 

other operating division’s) assessment of the entity’s compliance with the order. Finally, the 

Monitor and the entity (for example, a Chief Compliance Officer and relevant senior business 

executive) will need to certify the entity’s completion of the remediation plan. 

For a Consultant, no Division approval of the specific Consultant will typically be 

required. The Consultant’s responsibility will be to advise the entity regarding the 

implementation of remediation-related undertakings. The entity will need to periodically report 

to the Division on the progress of such implementation. Finally, each entity will need to have 

appropriate personnel (for example, a Chief Compliance Officer and relevant business executive) 

certify its completion of the remediation-related undertakings at the conclusion of the 

Consultant’s engagement.

Going forward, the Division anticipates recommending to the Commission that a Monitor 

be imposed in cases involving the most significant and/or pervasive compliance and control 

While going forward the Division will use the terms “Monitor” and “Consultant” as defined herein, in prior

resolutions the Division may have used those terms in ways that differ from how they are defined herein (for 

example, using “Consultant” to apply to each of the roles separately defined herein). In addition, the Division notes 

that in many Commission orders involving restitution, the National Futures Association is appointed as “Monitor” to 

collect restitution funds and oversee distributions to victims. In any future order appointing NFA as “Monitor” in 

such capacity as well as requiring a compliance Monitor as described herein, the Division’s recommended order will

clearly distinguish the two roles. 

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failures reflecting a lack of sufficient commitment to effective compliance, and that a Consultant 

will be recommended in less severe cases. Specifically: 

• A Monitor is appropriate where the pervasiveness and/or severity of the 

misconduct and/or the absence of effective controls is such that the Division lacks 

confidence that the entity will remediate its misconduct without the assistance of a 

neutral third party and oversight. 

• A Consultant is appropriate where the evidence persuades the Division that the 

entity requires the assistance of a neutral third party to advise regarding 

remediation, but can otherwise remediate its misconduct without oversight. 

III. Admissions 

Per current Division policy, whether a resolving respondent admits to the underlying 

wrongdoing is a factor the Division may consider when assessing the extent of a respondent’s 

cooperation.10 Certain recent resolutions have included admissions, reflecting the Division’s 

perspective that they are important components of orders in appropriate cases. 11 Admissions in 

resolutions achieve numerous goals: 

• the acceptance of responsibility promotes accountability and justice; 

• admissions can function as a form of deterrence; and 

• they facilitate comprehensive post-resolution cooperation where resolutions so 

require. 

In light of these considerations, the Division will take the following approach to 

admissions in the resolutions it recommends to the Commission. In negotiations, respondents 

should no longer assume that no-admit, no-deny resolutions are the default. Rather, in each case, 

the Division will discuss with respondents whether admissions are appropriate. In evaluating 

whether admissions should be required as part of the proposed resolution, Division staff will 

consider the facts and circumstances presented by each matter as well as the non-exhaustive list 

10 See Cooperation Factors for Companies and Cooperation Factors for Individuals, supra n.6. 

11 See, e.g., In re: JP Morgan Chase Bank, N.A., CFTC No. 23-61 (Sept. 29, 2023), and In re: Bank of 

America, N.A. and Merrill Lynch International, CFTC No. 23-58 (Sept. 29, 2023), available at CFTC Orders Three 

Financial Institutions to Pay Over $50 Million for Swap Reporting Failures and Other Violations; CFTC Orders 

Four Financial Institutions to Pay Total of $260 Million for Recordkeeping and Supervision Failures for Widespread 

Use of Unapproved Communication Methods (Aug. 8, 2023), available at CFTC Orders Four Financial Institutions 

to Pay Total of $260 Million for Recordkeeping and Supervision Failures for Widespread Use of Unapproved 

Communication Methods. 

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of factors set forth below. Each of these factors may be more or less relevant to the facts and 

circumstances of a particular matter and the type of violation at issue. No factor listed below is 

dispositive, and a case may present additional factors that are relevant to the inquiry. Examples 

of factors the Division will consider when assessing whether admissions are appropriate include: 

Factors counseling in favor of admissions 

• Whether the respondent is entering into a parallel criminal resolution where the 

respondent admits—through a guilty plea or otherwise—the underlying 

misconduct (such cases typically involve egregious conduct and significant harm 

or risks of harm to investors and markets). 

• Whether the evidence uncovered during the investigation conclusively establishes 

the misconduct (for example, the respondent admitted to the misconduct in 

testimony or documentary evidence compels the admissions). This weighs in 

favor of admitting the misconduct in the order as well. 

• Whether and to what extent a respondent seeks cooperation credit. As noted 

above, per current Division policy, whether a resolving respondent admits to the 

underlying wrongdoing is a factor the Division may consider when assessing the 

extent of a respondent’s cooperation.

• Whether the offense is a strict liability offense in clear violation of the law. In 

such cases, the key underlying factual question is whether activities that violated 

the law occurred; there is no need in such cases to assess a respondent’s state of 

mind. 

Factors counseling against admissions 

• Whether there is a realistic risk of criminal exposure uniquely arising from the act 

of admitting the misconduct. Where the respondent faces the realistic prospect of 

potential criminal liability relating to the misconduct, in certain cases it may be 

possible that admitting the misconduct could jeopardize the respondent’s ability to 

legitimately defend against the criminal case. 

• Whether there is a legitimate factual dispute where the Division is persuaded it 

faces significant litigation risk establishing the fact at trial (counsels against 

admissions only as to that disputed fact). 

Ultimately, whether to require admissions remains a fact-intensive determination 

accounting for the unique facts and circumstances of a matter. However, the Division intends to 

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generally apply the criteria above when considering this issue when assessing what resolutions to 

recommend to the Commission. 

The Division’s assessment of the proposed settlement to recommend to the Commission 

to resolve any matter is a discretionary function of the Division’s Director and staff and requires 

a case-by-case analysis of the specific facts and circumstances of each matter. Nothing in this 

Advisory should be deemed to oblige the Division or the Commission to consider one or more 

factors, or to give certain factors more weight than others in evaluating the appropriate penalty, 

the use of Monitors and Consultants, or requiring admissions. Further, nothing in the Advisory 

is intended to waive any pre-decisional or other privileges that may apply to the Commission’s 

or Division’s deliberations or decision-making regarding any proposed enforcement or 

resolution.12 

12 This staff guidance does not create any private rights and is not enforceable in court. The Commission will 

continue to exercise its independent judgment and discretion as to the appropriate resolution in each case. 

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