Transcript US Market Abuse Remedies

Proceedings
The Legal Process
• Administrative Proceedings
– CFTC Administrative
– Sec. 6(c), 6(d) and 6(e) of the Act
– Part 10 of the Regulations
• Civil Injunctive Proceedings
– Federal District Court
– Sec. 6c of the Act
• Criminal Proceedings
Federal District Court
Administrative Proceedings
• Heard by an Administrative Law Judge who
issues an Initial Decision
• Appeals
– To Commission
– To Federal Appellate Courts
Available Administrative Remedies
Section 6
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Cease & Desist
Revocation or Suspension of Registration
Trading Prohibition
Restitution (Reg. 10.110 – 10.114)
Civil Monetary Penalty (Sec. 6(e))
– US $120,000 or 3 times monetary gain
• Other Remedies by Settlement (Appendix A
to Part 10)
Civil Injunctive Proceedings
• Tried in United States District Court
• Appeals to Federal Appellate Courts
Remedies Available in Federal
Court Cases
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Ex parte relief
Asset freeze
Prevent destruction of documents
Appointment of receiver
Injunction – Preliminary and Permanent
Civil monetary penalty
Additional Forms of Equitable
Relief
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Disgorgement
Rescission
Accounting
Other by settlement
Criminal Violations
• All willful violations of the Commodity Exchange
Act and the CFTC’s regulations are criminal
violations, including market abuse provisions.
• But no person shall be subject to imprisonment for
the violation of any rule or regulation if such
person proves that he had no knowledge of such
rule or regulation.
Criminal Proceedings
•Prosecuted by the Department of Justice
•Tried in United States District Court
•Appeals to Federal Appellate Courts
Criminal Sanctions
• Felonies are punishable by a fine of not more than
US $1 million and imprisonment for not more than
5 years, or both.
• Insider trading by Commission employee or
exchange official:
• US $500,000 or imprisonment for not more than
five years, or both, together with the costs of
prosecution