The Commodity Futures Trading Commission (CFTC or Commission) released its enforcement results for fiscal year 2023 on November 7, 2023. The CFTC’s Division of Enforcement filed 96 enforcement actions in 2023 charging a range of violations in a variety of markets that resulted in more than $4.3 billion in civil monetary penalties, restitution, and disgorgement. Both metrics show an increase from last year, when the Commission initiated 82 enforcement actions and imposed more than $2.5 billion in restitution, disgorgement, and penalties. The uptick in cases stemmed largely from a near doubling of fraud-related cases.
FERC, CFTC, and State Energy Law Developments
The Commodity Futures Trading Commission’s (CFTC’s) Division of Enforcement announced that it has established a new task force—the Environmental Fraud Task Force—to combat environmental fraud and misconduct in derivatives and relevant spot markets, including the carbon markets.
One week after the Commodity Futures Trading Commission’s (CFTC) Whistleblower Office issued an alert seeking tips on potential fraud and manipulation in the carbon markets, the CFTC chairman announced that the second voluntary carbon markets convening will be held on July 19.
In recent remarks, Commodity Futures Trading Commission (CFTC) Commissioner Christy Goldsmith Romero proposed that the CFTC promote market resilience to climate-related risk by adopting an approach for environmental/climate-related products, such as carbon offsets, similar to the CFTC’s regulatory response to virtual currencies.
ESG. Net zero. Carbon sequestration. In 2023, all of these terms will continue to be widely referenced in mainstream media publications, corporate governance and shareholder materials, and regulatory filings and issuances. Although the terms are technically unrelated, at their core they reflect a growing social consciousness, both in the United States and abroad, concerning carbon dioxide (CO2) presence in the atmosphere and the impact of individual and corporate actions on greenhouse gas (GHG) emissions.
In an article published in Project Finance International, partners Levi McAllister and Pam Wu discuss some of the most relevant and pressing issues concerning carbon offsets and raise considerations as environmental, social, and governance (ESG), net-zero goals, and carbon sequestration issues continue into 2023.
The energy industry and market participants have provided a variety of comments on what role the Commodity Futures Trading Commission (CFTC) should play in the voluntary carbon markets, in response to a June 2022 request for information on how the CFTC can help enhance the integrity and transparency of the voluntary carbon markets and what aspects of the voluntary carbon markets are susceptible to fraud and manipulation.
In an article featured in our global energy industry newsletter, Empowered, partners Pam Wu and Levi McAllister discuss the factors preventing purchasers of carbon credits from having full confidence in the voluntary carbon markets. They also analyze efforts to establish standards to spur additional participation in these markets.
The Commodity Futures Trading Commission (CFTC or the Commission) released its enforcement results for fiscal year 2022 on October 20, 2022. The enforcement results detail the 82 enforcement actions the CFTC filed in 2022 and show that orders secured by the Commission imposed more than $2.5 billion in restitution, disgorgement, and civil monetary penalties, either through settlement or litigation.
The Commodity Futures Trading Commission (CFTC) issued orders on September 27, 2022, filing and settling charges against various affiliates of financial institutions for failing to maintain, preserve, or produce records that were required to be kept under the CFTC’s recordkeeping requirements and failing to diligently supervise matters related to their businesses. As FERC also has record retention requirements, we discuss key takeaways on compliance and communication methods in light of the CFTC’s orders.