CFTC Enforcement: New Guidance on Criminal Referrals Aligns with Executive Order

According to a Husch Blackwell article by Kip B. Randall and Sydney Sznajder, the Commodity Futures Trading Commission’s (CFTC) Division of Enforcement (DOE) issued an advisory letter on July 9, 2025, detailing new procedures for referring regulatory violations to the Department of Justice (DOJ), which will affect CFTC enforcement efforts going forward.

This move follows Executive Order 14294, “Fighting Overcriminalization in Federal Regulations,” signed by the White House on May 9, 2025. The order directs federal agencies to reduce the risk that individuals or businesses may face criminal liability for regulatory violations they were unaware of. In line with Section 7 of the executive order, agencies were required to publish guidance within 45 days on how they would address criminally liable offenses and submit a comprehensive list of such offenses, including applicable penalties and mens rea standards, within 365 days.

The CFTC’s advisory, authored by Acting DOE Director Paul Hayeck, outlines key factors staff will consider before referring matters to the DOJ. These include the harm or risk caused, the potential gain, whether the person had industry expertise or licensing, and evidence of the individual’s awareness of wrongdoing. Repeat offenses and the need for DOJ involvement to protect derivatives markets are also part of the assessment. The advisory reiterates that the CFTC intends to meet its second reporting requirement by May 2026.

For compliance professionals, this guidance signals a more selective DOJ referral policy that hinges on “willfulness” and industry awareness. However, CFTC  enforcement remains active. Strong internal compliance systems and clear response plans to regulatory inquiries are critical safeguards for businesses navigating evolving enforcement standards.