The CFTC’s Cooperation Reset

In February 2025, then-Acting Chairman Caroline Pham issued the CFTC’s first-ever cooperation “matrix.” 

Last week, David Miller rescinded that enforcement advisory in favor of a forthcoming new Staff Advisory that promises a “clear path to a declination” for parties that self report, fully cooperate, fully remediate, including through ongoing reporting of violative conduct, comply with guidelines on remediation and disgorgement, and present no “aggravating circumstances.” Much will depend on how those details are ultimately defined in the Staff Advisory and applied through the first few declinations that are publicly announced. The defense bar will be watching those test cases closely for signs that the new policy is meaningful in practice. 

A notable change in the new CFTC policy is that the Division of Enforcement will now award full credit for a self-report even if the agency had previously been made aware of the underlying issue confidentially. This differs significantly from the DOJ’s new Corporate Enforcement and Voluntary Self-Disclosure Policy which treats that scenario as a “near miss” and permits credit toward a non-prosecution agreement, but not a full declination. Given the CFTC’s disclosure last year that approximately one-third of its leads and 30% of its open investigations originate from whistleblowers, this new policy removes a meaningful element of chance that had previously complicated the decision whether to self-report to the CFTC. Another key change is that in assessing whether a party provides “full” cooperation, the decision going forward will be “binary,” and there will no longer be an assessment of whether cooperation is “satisfactory,” “excellent,” or “exemplary” with corresponding percentages of credit, as provided under the February 2025 cooperation matrix. It is unclear whether, under the new policy, “binary” means there will now be an on/off switch, whereby a failure to provide requested information or preserve a portion of relevant documents at any single point in a lengthy investigation could potentially end with zero cooperation credit. Similarly, the announcement itself points out that full cooperation must include remediation, and that remediation includes, where appropriate, disciplining relevant employees, including those responsible for the conduct and those with supervisory authority. Under this policy, it is possible that a company could end up with no cooperation credit if the Division disagrees with one of the company’s employee discipline decisions, even though all other criteria for declination have been met.

Additionally, although the policy is meant to provide a “clear” path toward a declination, it may not be obvious in advance of making a report whether the “aggravating circumstances” exception will foreclose that outcome. In his speech, Miller said that certain circumstances may preclude eligibility (e.g., pervasive intentional or reckless conduct by ownership or senior-most management, as well as recidivist activity involving intentional or reckless conduct), and then added, “but not necessarily so.” It remains to be seen how the policy will be applied in practice once the formal Staff Advisory is issued.