The Commodity Futures Trading Commission has rescinded a long-standing policy that barred settlements in enforcement actions when defendants continued to deny the agency's allegations. The change gives the regulator more flexibility in resolving cases and could speed resource savings and the return of money to injured investors.
Highlights
- CFTC rescinded its longstanding policy barring settlements with defendants who publicly deny allegations, aligning with settlement practices at most federal agencies.
- Effective immediately, CFTC will not enforce no-deny provisions in prior settlements, releasing affected defendants from previous restrictions on denying allegations.
- The policy change preserves CFTC's discretion to seek factual admissions in settlements when appropriate, but allows more flexibility in resolving enforcement actions.
Policy shift broadens settlement options
As announced by the Commodity Futures Trading Commission, the rescinded rule in Appendix A to Part 10 had stated that the agency would not accept settlement offers if a defendant kept denying allegations in a complaint or administrative order.The commission says removing the policy brings its approach into line with most federal agencies and reflects its view that such denials may have only a minimal effect on the public interest. It also says the previous rule may have created the mistaken impression that the agency was trying to shield itself from criticism.
CFTC Chairman Michael S. Selig says the commission has refused for nearly three decades to settle cases unless defendants agreed not to publicly deny the agency's allegations. He says rescinding the no-deny policy makes the commission's approach consistent with regulators across government.
Director of the Division of Enforcement David Miller says the move harmonizes the commission's settlement practices with those of other agencies and supports fairer resolutions in enforcement matters.
Implications for enforcement and investors
The commission says it will not enforce existing no-deny provisions that have already been entered in prior settlements. That means defendants covered by those provisions will no longer face enforcement of that requirement after the policy's rescission.The change does not alter the CFTC's discretion to settle with defendants who decline to admit facts or liability. It also does not limit the agency's ability to negotiate for admissions as part of a settlement when it considers that appropriate.
Our earlier article on proposed OMB changes to federal research grant rules explained how the draft measures could tighten political oversight of science funding and weaken independent peer review. It also outlined restrictions affecting DEI- and “gender ideology”-linked projects, dissemination and collaboration, with critics warning the approach could erode research quality and long-term U.S. scientific leadership.
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