On March 14, 2018, U.S. Commodity Futures Trading Commission (“CFTC”) Chairman J. Christopher Giancarlo gave a speech at the Futures Industry Association (“FIA”) annual meeting in Boca Raton, Florida, in which he reviewed the CFTC’s activities during the past year and provided a preview of CFTC priorities for the coming year.[1]  Among the issues addressed in Chairman Giancarlo’s speech were the CFTC’s successes and priorities in enforcement, including in particular initiatives in the area of anti-spoofing and virtual currencies. Continue Reading Recent CFTC Enforcement Actions: Spoofing and Virtual Currency Task Forces

Investigations into potential violations of U.S. and non-U.S. securities laws are often resolved by a settlement requiring the business to make one or more large settlement payments.  We have seen settlements paid to the DOJ, the SEC, other U.S. and non-U.S. regulators, and private plaintiffs.  An important question is whether the payment will be deductible for tax purposes.  Since 1969, the U.S. tax law has denied a deduction for “any fine or similar penalty paid to a government for the violation of any law.”[i]  This limitation was significantly changed by the U.S. tax reform law enacted in December of 2017 (known as the Tax Cuts & Jobs Act or “TCJA”).  These changes, which had been proposed in Congress over 30 times since 2003 but not enacted until now, respond in part to disputes the IRS has had with taxpayers in the past.  Continue Reading Settlement Payments Under the New Tax Reform Law

In a September 25, 2017 speech in New York, U.S. Commodity Futures Trading Commission (the “CFTC”) Division of Enforcement (the “Division”) Director James McDonald outlined the CFTC’s focus on creating greater incentives for self-reporting and cooperation in order to deter and detect misconduct in the commodities markets. Director McDonald’s speech accompanied the release of an Updated Advisory on Self Reporting and Full Cooperation, which supplements the guidance issued by the CFTC earlier this year.

The new guidance reflects an effort by the CFTC to rebalance the incentives facing firms who identify potential misconduct to favor voluntary reporting and pro-active cooperation, reinforced by the potential for concrete benefits in the form of fine reductions and, potentially, declination of prosecution in appropriate cases. Commodities market participants and financial institutions should take note of this guidance when considering how to respond to potential evidence of misconduct and in dealing with the Division.

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