Fed Financial Regulator Holds Out Generous “Self-Reporting” Option

The head of enforcement at the Commodity Futures Trading Commission, a reputed tough watchdog under the Obama administration, says the agency will actively encourage self-reporting by the companies it regulates. For those that come clean the rewards in the form of reduced penalties will be substantial, and in some cases, they could be dropped. The new enforcement director is a former federal prosecutor in the Southern District of New York, where he learned that strong incentives for self-reporting are a powerful law enforcement tool, he told the New York Times. He says the commission recognizes that “no matter how much corporate leaders may want to foster compliance within the company, when they detect misconduct their decision whether to voluntarily report it often comes down to their perception of whether they’ll be treated fairly.” The Times article suggests the new emphasis is consistent with the announced policy of the Trump administration to roll back business regulation generally. It also quotes the commissions’s previous director of enforcement, now a partner at Zuckerman Spaeder in Washington, as saying the agency “is so chronically and acutely under-resourced that it’s even more necessary to encourage cooperation.”