Commodity Futures Trading Commission

Steptoe’s team of regulatory and enforcement attorneys, litigators, and government affairs professionals have worked in and with the Commodity Futures Trading Commission (CFTC) since its inception four decades ago.  Several members of our team previously held senior-level positions at the CFTC, including acting chairman and commissioner, director of the CFTC Division of Market Oversight, and litigator and regulatory attorney in the Office of the General Counsel of the CFTC.  They understand the nuances of the CFTC’s policies and procedures and trading in the cash and derivatives markets and have unique insight into the drivers behind regulatory and enforcement actions.  

Our clients include a variety of industry and market-focused trade associations and individual companies, such as financial institutions, registered market intermediaries, technology providers, and digital currency trading venues, financial and non-financial end users such as energy companies and investment funds, and their directors, officers, and traders.

Our team has been involved in all aspects of financial regulatory reform, including legislative advocacy, statutory enactment and subsequent rulemaking and enforcement actions related to the Dodd-Frank Act.  We represent clients though all stages of the rulemaking process.  We work to minimize ambiguities in the regulations and ensure our clients’ perspectives are heard.  Our work has included obtaining interpretive guidance and ‘no action’ letters.  We provide advice on statutory, regulatory, oversight, compliance, and enforcement issues involving commodities, agriculture and energy products, financial products, and other nontraditional instruments.  We regularly counsel clients on swaps regulatory requirements under the Dodd-Frank Act and CFTC and Securities and Exchange Commission (SEC) regulations, and conduct derivatives and securities trading compliance training.  We also bring extensive experience addressing issues related to the approval of new derivatives products, rules regarding trading venues, exchanges and swap data repositories, as well as compliance with CFTC and self-regulatory organization regulatory requirements.  Our team also includes experienced trial and appellate lawyers who have significant experience defending clients in investigations and enforcement matters by the CFTC.  Our experience includes representing clients in many regulatory investigations involving allegations of price manipulation, fraud, spoofing, wash sales, and other types of market abuses, as well as alleged large trader reporting, swap reporting, and futures position limit violations.

Representative Matters

Legislative Advocacy

  • Launching and organizing several financial services trade associations, guiding them through their formative stages, and establishing ongoing working relationships with key members of Congress and regulators
  • Advising and advocating on behalf of a major financial market infrastructure utility on numerous matters, throughout the development of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) on issues related to swap data repositories (Title VII) and financial market utilities (Title VIII)
  • Assisting a trade association of wholesale market brokers in developing overall legislative and regulatory strategies, and assisting in responding to legislative inquiries and drafting legislative testimony related to issues such as over-the-counter (OTC) derivatives regulatory reform, derivatives trade execution, financial market regulatory oversight, and systemic risk oversight
  • Providing technology company focused on cognitive computing and holistic surveillance with strategic counsel encouraging policymakers to modernize regulatory surveillance requirements in line with current technological capabilities

Regulatory Advocacy

  • Secured no-action letter relief for a coalition of community development financial institutions (CDFIs) from the CFTC for a Dodd-Frank Act requirement related to the clearing of interest rate swaps
  • Secured no-action letter relief on behalf of the Wholesale Markets Brokers Association Americas, for a series of Dodd-Frank Act regulations promulgated by the CFTC related to swap execution facility trading of swaps and compliance with statutory core principle obligations
  • Advocated on behalf of an association representing the interests of institutional investors for specific changes to CFTC swap execution facility regulations and swap trading rules in response to the publication of a white paper by a commissioner
  • Advocated on behalf of an association representing the interests of institutional foreign exchange market participants before the CFTC and the SEC regarding proposed rules limiting institutional investors’ use of derivatives, including foreign exchange derivatives contracts
  • Advocated on behalf of an association of financial guaranty insurers and reinsurers before the CFTC and SEC regarding proposed definitional rules relating to “swaps”, “swap dealers” and “major swap participants” and coordination of international swap regulation and cross border issues
  • Advocated on behalf of a US-based cryptocurrency exchange on the issue of what constitutes “actual delivery” in the digital currency context under CFTC rules

Legal Compliance

  • Advised financial services firm on its ‘last look’ disclosure to make sure it is both accurate and sufficient to avoid any possible investigations related to ‘last look’ developments
  • Advised and represented a commodity pool advisor that services the hedge fund industry with respect to SEC, CFTC, and Public Company Accounting Oversight Board (PCAOB) regulatory requirements and inquiries
  • Represented and counseled a foreign-based foreign exchange dealer with respect to CFTC regulatory requirements
  • Represented and counseled a London-based broker-dealer with respect to CFTC regulatory requirements, including the CFTC part 30 rules governing foreign brokers
  • Counseled foreign financial institutions on swap reporting and other CFTC requirements
  • Counseled market intermediaries on compliance with CFTC regulatory requirements relating to retail commodity transactions
  • Counseled commodity trading advisors and commodity pool operators on registration, reporting, recordkeeping and other CFTC and SEC regulatory requirements
  • Counseled and trained clients on derivatives and cash market trading compliance
  • Assisted clients in preparing internal compliance policies and procedures governing futures, swaps, and cash market trading, reporting, and recordkeeping

Investigations and Enforcement

  • Representation of financial institutions in investigations of swap reporting
  • Representation of many different energy traders and entities in CFTC, Federal Energy Regulatory Commission (FERC), and Department of Justice investigations of power, natural gas, crude oil, propane, heating oil and gasoline trading activity 
  • Representation of the Futures Industry Association as an amicus curiae in a US Court of Appeals for the Seventh Circuit appeal in an bankruptcy proceeding of a failed futures commission merchant
  • Representation of an institution in CFTC investigations of precious metals trading involving retail commodities transactions
  • Representation of many different traders and entities in CFTC investigations of cash market and derivatives trading in financial products, agricultural commodities, metals, and currencies
  • Representation of foreign commercial end-users in CFTC investigations of alleged cash market reporting violations
  • Representation of foreign traders in CFTC investigations of trading on US exchanges
  • Representation of clients in many different investigations conducted by the CME Group, the Intercontinental Exchange, the New York Mercantile Exchange, the Chicago Board Options Exchange, the National Futures Association, and other self-regulatory organizations and in proceedings before their business conduct committees and hearing panels
  • Representation of a foreign financial institution in an investigation relating to compliance with CFTC swap regulations
  • Obtaining for a financial services firm an injunction that enjoined its former customer from pursuing CFTC administrative proceedings in lieu of arbitration representation of energy producer in investigation of renewable identification numbers (RIN) trading

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