On July 9, 2025, the Commodity Futures Trading Commission’s Division of Enforcement (“DOE”) issued a Staff Advisory in furtherance of Executive Order 14294, Fighting Overcriminalization in Federal Regulations, issued by President Trump on May 9, 2025. Consistent with the Executive Order’s directive that federal agencies publicly outline their plans for addressing “criminal regulatory offenses” (i.e., Federal regulations enforceable by a criminal penalty), the Advisory details the Division’s approach to evaluating when to refer alleged violations of such criminal regulatory offenses to the Department of Justice (“DOJ”) for prosecution. Key aspects of the Advisory include:
- Clear Criteria for Evaluating Criminal Referrals. The Advisory establishes specific factors DOE staff will consider in determining whether to refer potential violations of criminal regulatory offenses to DOJ, including “among other factors”:
- The harm or risk of harm, financial or otherwise, caused by the alleged offense.
- The potential gain to the defendant that could result from the alleged offense.
- Whether the defendant possessed specialized knowledge, expertise, or was licensed in an industry related to the rule or regulation at issue.
- Evidence of the defendant’s general awareness of the unlawfulness of the conduct and knowledge of the relevant regulatory requirements.
- Whether the defendant is a recidivist or has otherwise engaged in a pattern of misconduct.
- Whether DOJ involvement would provide meaningful additional protection to participants in the derivatives markets.
- Future Reporting Obligations. The Advisory reiterates the requirement under the Executive Order that, by May 9, 2026, the Commission must submit to the Office of Management and Budget a report detailing each criminal regulatory offense enforceable by the Commission or DOJ, specifying the range of possible criminal penalties and applicable mens rea standards.
- No Creation of Enforceable Rights or Benefits; No Waiver. The Advisory explicitly clarifies that it does not create any enforceable rights—substantive or procedural—against the government. Furthermore, the Advisory is not intended to waive any pre-decisional or other privileges that may apply to the Commission’s or Division’s deliberations or decision-making regarding potential enforcement actions or potential rulemaking.
The Advisory should be considered in light of DOJ’s evolving white-collar enforcement priorities—including a continued focus on complex fraud—and the Commission’s changes to its enforcement procedures.