51 U.S. Att'ys Bull. 9 (2003)
The Commodity Futures Trading Commission's (CFTC) Assault on Fraud

handle is hein.journals/usab51 and id is 254 raw text is: 







Federal Prosecutions ofBusiness Organizations
at  I.A. The general principles and commentary
in Federal Prosecutions of Business
Organizations provide a framework within which
to make the difficult charging decisions that arise
during the investigations of corporate subjects and
targets.V


ABOUT THE AUTHOR


The Commodity Futures Trading

Commission's (CFTC) Assault on

Fraud


Daniel A. Nathan
Chief  Office of Cooperative Enforcement
Division ofEnforcement
Commodity   Futures Trading  Commission

    The bad news is that commodities fraud is
taking its place on the corporate and consumer
fraud landscape alongside financial fraud, prime
bank schemes, front-running, and other
unfortunate by-products of the modern financial
era. The good news is that the Commodity Futures
Trading Commission (CFTC)  is up to the job of
pursuing this fraud, and has been pursuing it in
close cooperation with the Department of Justice
and U.S. Attorneys, among others.
    As a result of increasing recognition by
regulators of the prevalence of commodities fraud,
and the CFTC's aggressive enforcement program
attacking that fraud, the CFTC's Division of
Enforcement has gained recognition and respect
for its important role in financial regulation. The
significance of the CFTC's regulatory regime in
the broader worlds of corporate fraud and
sophisticated white collar schemes is evidenced
by the CFTC's membership in the President's
Working  Group on Financial Markets and the
President's Corporate Fraud Task Force. Always
active in pursuing matters within its jurisdiction,
in recent years the Division of Enforcement
(Division) has participated in joint fraud
investigations and enforcement actions with other
federal and state civil and criminal agencies, and
presented training in commodity violations,


including energy-related and foreign currency
trading violations, to other regulators.
    From a public protection standpoint, this is all
to the good. Greater awareness by the law
enforcement community of the CFTC's
jurisdiction, and the Division's ability to
aggressively prosecute commodities fraud, means
that more of this fraud will be addressed by the
CFTC,  on its own or together with criminal
authorities. Moreover, as more regulators
nationwide pursue criminal and civil commodities
fraud cases on the federal and state level,
members  of the public will learn to recognize the
many  common  forms this fraud takes and be
better able to protect themselves against it.
I. The CFTC's jurisdiction
A. What  commodities fraud looks like
    Consider these increasingly common
scenarios:
*   An individual invests funds in a pool, or self
    described hedge fund, only to find that the
    money and the promoter have disappeared.
*   An individual receives an unsolicited cold
    call or spam e-mail, or sees an ad on
    television, promoting investments in heating
    oil options based on the brokerage firm's
    purported track record. The ad encourages the
    public to take advantage of the approaching
    winter and the inevitable rise in heating oil
    prices.
*   An investor receives an aggressive solicitation
    for the purchase of a specified foreign


UNITED STATES ATTORNEYS' BULLETIN


JSean  R. Berry is an Assistant United States
Attorney in the Northern District of Iowa where
he is responsible for the investigation and
prosecution of white collar and computer crimes.
Mr. Berry was Chief of the Major Frauds Section
in the Central District of California prior to
joining the Northern District of lowa's
United States Attorney's Office.4


NOVEMBER  2003


9

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