CFTC Rescinds Policy on Settlement Denials in Enforcement Actions

The Commodity Futures Trading Commission (CFTC) announced it has rescinded a policy that prevented it from accepting settlement offers where the defendant continued to deny the allegations. This policy, in place for nearly three decades, was codified in Appendix A to Part 10. Its removal allows the CFTC to have greater flexibility in settling enforcement actions, which can save resources, provide certainty, and potentially speed up the return of funds to investors harmed by violations.

The policy's removal reflects a recognition that the impact of denial on public interest may be minimal and that the previous stance might have created an impression that the agency was trying to avoid criticism. CFTC Chairman Michael S. Selig expressed satisfaction with the change, emphasizing that it aligns the agency's approach with other federal regulators. The Director of the Division of Enforcement, David Miller, noted that the move ensures fairer resolutions in enforcement matters.

Existing no-deny provisions already entered into agreements will no longer be enforced. However, the CFTC retains the discretion to settle cases where defendants do not admit facts or liability, or to negotiate admissions as part of settlement agreements.

This change is significant because it could lead to more settlements in enforcement cases, potentially impacting how violations are resolved and how quickly investors might see restitution.