CFTC Enforcement Reset: Three Changes Clients Should Watch

Key Takeaways

• Newly appointed Director of the Division of Enforcement (the Division) of the Commodity Futures Trading Commission (CFTC) David Miller recently announced three key changes in CFTC enforcement policy.
• The first shift entails new enforcement priorities, including insider trading, market manipulation, retail fraud, and more.
• Second, Miller announced heightened scrutiny of insider trading.
• And third, the Division will employ a new approach to analyzing entities’ cooperation during CFTC investigations.

On March 31, 2026, newly appointed Division Director David Miller delivered remarks and participated in a fireside chat at the NYU Law Program on Corporate Compliance and Enforcement. During the discussion, Miller announced three notable shifts in CFTC enforcement policy: (1) new enforcement priorities, (2) a specific focus on insider trading in the prediction markets, and (3) a revised framework for how the Division will evaluate cooperation in investigations.

Enforcement Priority Areas

Miller announced that the Division will have five priority areas for enforcement: (1) insider trading, (2) market manipulation, (3) market abuse/disruptive trading, (4) retail fraud, and (5) willful violations of Anti-Money Laundering (AML) and Know-Your-Customer (KYC) laws and rules. He also stated that the Division is committed to hiring additional staff as part of this effort.

Insider Trading

Historically, the CFTC has not pursued many cases involving insider trading. Miller emphasized that the Division going forward will be prioritizing those cases and, as described in further detail below, they will be looking closely for potential insider trading in the prediction markets. Trading in the futures and derivatives markets based on material nonpublic information (MNPI) that has been misappropriated is a violation of the Commodity Exchange Act (CEA). Insider trading rules under the CEA are modeled after the rules under the Securities laws but are also necessarily different. The markets regulated by the CFTC are specifically intended to permit price discovery and risk management such as hedging. This means that commodities and futures market participants are free to trade on their company’s rightfully owned information (which may be MNPI) for the benefit of their company. What they cannot do is trade on information that was disclosed in breach of a duty of trust and confidence.

Miller also addressed insider trading in the context of prediction markets where participants buy and sell contracts based on the anticipated outcome of future events. While he acknowledged that the issue is still being litigated,[1] he also said it is the CFTC’s firmly held view that event contracts are swaps and will be treated as such for purposes of the CEA’s anti-fraud provisions and associated rules.[2]

Market Manipulation and Market Abuse

Miller stated that the Division will focus on market manipulation in the energy markets (which are particularly susceptible to volatility due to geopolitical events), as price increases in those markets can affect many goods in production and shipping, thus having a broad inflationary effect. Additionally, because energy is more difficult than other commodities to store, it can be more challenging for the energy markets to adapt to changing cost levels. Miller mentioned that the regulated exchanges are critical to this effort and are obligated to have appropriate surveillance, compliance practices, and procedures and are only permitted to list contracts that are not susceptible to manipulation. Miller also identified the SEC, self-regulatory organizations, state regulators, and federal criminal authorities as important partners in this effort.

With respect to market abuse, which is a form of market manipulation, Miller stated that the Division will focus on spoofing (placing an order with an intent to cancel it), disruptive trading during a closing period, and wash trading (placing offsetting trades or roundtrip trades in order to send artificial pricing signals).

Retail Fraud

With respect to retail fraud, Miller stated they will be looking at Ponzi schemes, commodity pool frauds, pig-butchering, impersonation frauds, and phishing attacks. Miller identified this as an important area as retail fraud often targets at-risk populations such as the elderly, those with limited financial literacy, and individuals who are least likely to afford loss of their savings.

AML and KYC

The fifth priority area identified for enforcement is the willful failure to follow AML and KYC laws and rules. The focus will be on willful violations and not mere technical violations. Miller stated that AML and KYC laws are an important focus as they are essential in fighting terrorism, drug trafficking, and fraud.

Cooperation

Miller’s final area of remarks covered a revamp of the cooperation rules applicable to corporate entities. In February 2025, then-Acting Chairman Caroline Pham issued the CFTC’s first ever cooperation “matrix.”[3] On March 31, 2026, Miller stated that enforcement advisory will be rescinded in favor of a forthcoming 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 will now award full credit for a self-report even if it is already aware of the underlying issue through other nonpublic means. This differs significantly from the DOJ’s new Corporate Enforcement and Voluntary Self-Disclosure Policy,[4] which treats that scenario as a “near miss” and permits credit toward a nonprosecution 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,[5] 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, where 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 remediation is required in order to cooperate fully 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.

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The formal staff advisory will likely provide greater detail. In the meantime, the Division appears poised to ramp up after a period of relative inactivity. We expect the Division to expand its staffing, focus on the identified key enforcement priorities, and implement the announced initiative that will provide incentives for self-reporting and fulsome cooperation.

Endnotes

[1] In fact, the CFTC just last week filed suit against the states of Arizona, Connecticut, and Illinois over their efforts to regulate prediction markets, claiming that state law is preempted in this area and that the CFTC has the exclusive authority to regulate event contracts as swaps. 

[2] See Section 6(c)(1) of the CEA and CFTC Rule 180.1; see also Section 4c(a)(4) of the CEA prohibiting government employees from trading using government MNPI (often referred to as the Eddie Murphy Rule).

[3] CFTC Release Number 9054-25 (Feb. 25, 2025).

[4] U.S. Department of Justice Corporate Enforcement and Voluntary Self-Disclosure Policy (Mar. 10, 2026).

[5] CFTC Whistleblower Program and Customer Education Initiatives 2025 Annual Report at 6 (Feb. 2026).