CFTC issues new enforcement advisory on self-reporting, cooperation, and remediation

The Commodity Futures Trading Commission (CFTC, or Commission) has issued an enforcement advisory detailing how its Division of Enforcement (Division) will evaluate self-reporting, cooperation, and remediation from companies and individuals in enforcement actions.

The advisory, published on February 25, 2025, introduces a mitigation credit matrix, marking the first time the Division will use such a tool to determine the appropriate mitigation credit to apply. In addition, the advisory moves the Commission into alignment with other self-reporting and cooperation practices followed by the Department of Justice (DOJ) and other US financial regulators, with the aim to conserve government resources and promote market integrity through self-reporting and cooperation.

The advisory comes from newly-installed CFTC Enforcement Director, Brian Young, who spent nearly two decades with the DOJ and prosecuted some of the most significant commodities fraud cases over the past 15 years. As such, the principles outlined in this advisory draw from a DOJ-style framework, including the use of terms, such as "substantial assistance."

In this alert, we offer an overview of the enforcement advisory and highlight key details.

Self-reporting evaluation

The Division will assess self-reporting on a three-tier scale: No self-report, satisfactory self-report, and exemplary self-report.

To receive credit, disclosures must be voluntary, timely, complete, and made to the Commission. The advisory defines these terms as follows:

• Voluntary: Self-reports will be considered voluntary if made prior to an imminent threat of exposure of the potential violation. The Division will consider whether the potential violation was already publicly known or known to a government actor, and whether it was reasonable to assume that the Division could learn of the potential violation directly from another actor (eg, through parallel investigations).


• Timely: Timeliness of the self-report will be assessed by considering whether it was made reasonably prompt, with attention given to an entity’s efforts to disclose (eg, discovery of a potential violation, escalation, investigation, management review, and governance requirements). Notably, unlike the DOJ Criminal Division’s Corporate Enforcement Policy and Voluntary Self-Disclosure Policy, which has a 120-day timeliness trigger for companies to receive certain credit, the Commission has not yet provided guidance on the number of days after which a disclosure is no longer considered “timely.”


• Complete: Completeness of the self-report will be assessed by considering whether all material information known at the time of the disclosure was included.


• Made to the Commission: Finally, a self-report will be made to the Commission if it is made to either the Division of Enforcement or an Operating Division that primarily interprets and applies the regulation that is the subject of the potential violation.

The Division will provide a safe harbor for good faith self-reporting if any inaccurate information is supplemented and corrected promptly after discovery.

The following chart illustrates the three tiers that the Division will use in evaluating self-reporting:

Tier	Criteria of self-reporting
Tier 1: No self-report	A self-report is placed in this tier if: No timely self-report is made The self-report is made with information already known from other sources, or The self-report is not reasonably related to the potential violation or not reasonably designed to notify the Commission of the potential violation.
Tier 2: Satisfactory self-report	A self-report is considered satisfactory if it is: Made to an appropriate division Notifies the Commission of the potential violation, but Does not include all material information reasonably related to the potential violation that the reporting party knew at the time of the self-report.
Tier 3: Exemplary self-report	A self-report is considered exemplary if it is: Made to an appropriate division Notifies the Commission of the potential violation Includes all material information reasonably related to the potential violation that the reporting party knew at the time of the self-report, and Includes additional information that assists the Division with conserving resources in the Division’s investigation.

 

Cooperation and remediation evaluation

Cooperation will be evaluated on a four-tier scale: No cooperation, satisfactory cooperation, excellent cooperation, and exemplary cooperation.

In considering the tier that a cooperating entity falls into for mitigation purposes (ie, for determining any discount against an initial civil monetary penalty calculation, described in greater detail below), the Division will consider timeliness, credibility, voluntariness, adequacy of resources used for cooperation, extent of the cooperation, and whether the cooperation resulted in material assistance to the Division’s investigation.

Mitigation credit for cooperation is evaluated separately from mitigation credit for self-reporting. The Division will also consider remediation efforts as part of its evaluation of cooperation, focusing on whether substantial efforts were made to prevent future violations. Other CFTC Operating Divisions will be involved in the assessment of remediation.

The following chart illustrates the four tiers that the Division will use in evaluating cooperation:

Tier	Criteria of cooperation
Tier 1: No cooperation	Cooperation is placed in this tier if: Cooperation provides no substantial assistance beyond required legal obligations.
Tier 2: Satisfactory cooperation	Cooperation is considered satisfactory if it: Provides substantial assistance Includes voluntary production of documents and information Arranges for voluntary witness interviews, and Makes basic presentations on legal and factual issues.
Tier 3: Excellent cooperation	Cooperation is considered excellent if it: Meets the criteria for the second tier Consistently provides substantial assistance Conducts internal investigations or reviews Provides thorough analysis of potential violation, root cause, and corrective action for remediation, and Allows the use of internal or external expert resources and consultants, as appropriate.
Tier 4: Exemplary cooperation	Cooperation considered exemplary if it: Meets the criteria for the third tier Consistently provides material assistance Provides proactive engagement and use of significant resources Results in significant completion of remediation, and Implements accountability measures, as appropriate.

 

Mitigation credit matrix

The advisory includes a mitigation credit matrix that describes the presumptive mitigation credit, which is represented as a percentage of the Division’s initial calculation of the civil monetary penalty, that a party may be eligible for if they have self-reported and/or cooperated. The presumptive mitigation credit ranges from 0 percent for no self-report and no cooperation to 55 percent for an exemplary self-report and exemplary cooperation. The Division retains the discretion to deviate from the mitigation credit matrix based on the unique facts and circumstances of a particular case. Additionally, the Division identified that it may recommend a declination of any action in extraordinary circumstances, such as instances where a person is the first to report persuasive fraud, manipulation, or abuse involving multiple parties, and provides exemplary cooperation.

The following chart illustrates the credit percentages of the mitigation credit matrix:

	Tier 1: No cooperation	Tier 2: Satisfactory cooperation	Tier 3: Excellent cooperation	Tier 4: Exemplary cooperation
Tier 1: No self-report	0 percent	10 percent	20 percent	35 percent
Tier 2: Satisfactory self-report	10 percent	20 percent	30 percent	45 percent
Tier 3: Exemplary self-report	20 percent	30 percent	40 percent	55 percent

 

Key takeaways

The Commission’s enforcement advisory on self-reporting, cooperation, and remediation may be, in its view, a significant step towards enhancing accountability and efficiency in enforcement actions. Although the nature of any cooperation and determining whether to self-report are typically fact-driven decisions, companies subject to the Commission’s regulatory oversight are encouraged to consider:

• Reviewing and updating compliance programs to ensure they align with the Commission’s expectations for self-reporting, cooperation, and remediation. This includes establishing clear procedures for detecting, escalating, and investigating a potential violation; assessing whether to make a voluntary disclosure; and developing a process to ensure timely evaluation of potential self-reporting.


• Evaluating current policies on self-reporting and cooperation to maximize potential mitigation credits, including understanding the criteria for satisfactory and exemplary self-reporting and cooperation and ensuring that internal processes support these standards where appropriate.


• Engaging in proactive remediation efforts to prevent future violations. This includes, where appropriate, conducting thorough internal investigations, ensuring that compliance programs are robust and effective, and engaging an outside remediation compliance expert.


• Regularly monitoring CFTC advisories and guidance to ensure ongoing compliance and readiness to respond to potential enforcement investigations.


• The interaction between suspicious activity reporting (SAR) obligations for Bank Secrecy Act-regulated entities subject to the Commission’s jurisdiction and the voluntariness of a self-report. To date, the Commission has not provided guidance on this question, and it could mean, for example, that a self-report is neither voluntary nor timely if it would otherwise trigger a SAR and/or is not reported prior to the 30-day SAR filing deadline.

For more information

If you have any questions about this action or developing an effective self-reporting and cooperation program, please contact the authors, your DLA Piper relationship attorney, or any member of DLA Piper’s White Collar practice.