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Today, after obtaining permission from the Commission’s Office of the General Counsel, I am releasing my dissent in a redacted form to the request by the Division of Enforcement (DOE) to issue an omnibus order of investigation that, through an “absent objection” process, could potentially be extended continuously without the opportunity for a Commission vote. I believe three steps must be taken to ensure that the Commission is executing its enforcement authority in a transparent and legally sound manner.
First, I call upon DOE to recirculate the omnibus order without the absent objection provision. I also encourage the Commission to take immediate steps to reevaluate its procedures to ensure that they have legal authority and are transparent to the public.
I believe in the robust use of the Commission’s enforcement authority to thwart fraud, manipulation, and abuse in CFTC-regulated markets. My concern is with the process that DOE seeks to utilize to extend the duration of these orders.
I acknowledge that, at times, the Commission must rely on various procedures, including the absent objection process and no-action relief to provide direction and/or guidance to market participants in a timely and efficient manner. However, this is in stark contrast to the manner in which the Commission should carry out its enforcement authority. Unlike staff guidance and interpretive statements, the initiation and extensions of enforcement investigations must be confined to the powers granted to the Commission by Congress.
Second, given the importance and magnitude of its mission, the Commission must clarify its policies and procedures to ensure transparency and prevent the misuse of no-action relief, omnibus orders and the absent objection process.
Third, to ensure that the Commission is not abusing its regulatory authority or compromising its enforcement powers, I invite Congress to conduct a full review of the Commission’s internal policies and procedures for various actions and interpretations of the Commodity Exchange Act (CEA). If Congress is dissatisfied with the Commission’s current practices and procedures, it should then enact reforms to the CEA to impose discipline on the Commission so that it complies with the Administrative Procedure Act and other laws.
I am confident the Commission can fulfill its mission in a transparent and legally sound manner.
