The Law Offices of Robert Wayne Pearce, P.A. and our CFTC defense lawyers have substantial experience handling CFTC investigations and enforcement proceedings across the entire country.
Contact us online or telephone our law firm toll free at 800-732-2889.
Do not take being investigated by the CFTC lightly. Protect your career and your future and seek experienced legal counsel immediately.
WE ARE CFTC DEFENSE LAWYERS WHO HANDLE CFTC INVESTIGATIONS AND ENFORCEMENT PROCEEDINGS THROUGHOUT THE UNITED STATES
Congress enacted the Commodities Futures Trading Act of 1974 (CEA) and established the Commodities Futures Trading Commission (the “CFTC”) to regulate the commodities futures industry in the United States.
It regulates the creation, modification and trading of all futures contracts to promote the industry and protect investors from fraud through misrepresentations and misleading statements, manipulation, fraudulent devices and schemes, cheating, fictitious trades, and misuse of customer funds.
In 1982, the CEA was amended and now regulates all futures contracts and options traded on U.S. futures exchanges. In 2000, Congress amended the CEA once again by enacting the Commodity Futures Modernization Act to increase competition and reduce systemic risk in futures and the over-the-counter derivatives market.
The last major revision of the CEA came with the Dodd-Frank Act, which gave the CFTC new enforcement authority over futures, swaps, leveraged precious metal transactions and broader powers to regulate fraud in actual purchases of a commodity known as “spot” or “physical” transactions. In addition to prohibiting misrepresentations, misleading statements and price manipulation, the CEA now prohibits (like the 34 Act Rule 10b-5) “manipulative or deceptive devices or contrivances.”
The CFTC investigates and prosecutes alleged violations of the CEA and CFTC Regulations in CFTC administrative proceedings and federal court enforcement proceedings.
The CFTC works closely with the U.S. Attorney’s Office (USAO) and Federal Trade Commission (FTC) in policing the commodities markets, so those of you in this business should be concerned whenever subpoenas are issued and CFTC investigators knock on your door.
WHAT SHOULD I DO WHEN I RECEIVE A CFTC SUBPOENA?
The CFTC subpoenas are issued to companies and individuals to collect evidence when it has reason to believe the federal securities laws may have been violated.
At this point, a Formal Order of Investigation has been entered and authority has been granted to its attorneys and investigators to subpoena documents and take testimony to determine whether indeed there is evidence that any violations have occurred.
Subpoenas are issued to persons who may ultimately be the target or subject of the investigation as either a respondent in an administrative proceeding or defendant in an enforcement proceeding to be filed in Federal court.
Subpoenas are also issued to individuals and entities the CFTC attorneys and investigators believe may have some evidence of the suspected violation. The CFTC will not tell you whether you are a target, subject or mere witness. In fact, the CFTC attorneys and investigators will tell you nothing about the investigation!
So, the first thing you should do is contact an experienced CFTC defense attorney to help you to quickly decide how you are going to respond to the subpoena. Individuals (not corporations or other legal entities) always have their right to assert their privilege to not incriminate oneself as guaranteed by the Fifth Amendment to the U.S. Constitution. Once you produce documents or information or testify it may be too late to assert your Fifth Amendment right! In a published Court opinion, Federal District Court Judge Janet C. Hall wrote:
“Since 1983, Attorney Pearce has continued his specialized education by attending hundreds of hours of seminars focused on SEC and Commodity Futures Trading Commission (“CFTC”) investigation and enforcement proceedings and the practices and procedures of the securities and commodities industry. He has received intensive training on broker-dealer practices and procedures (both front and back office) in the OTC market and the New York Stock Exchange (“NYSE”), the American Stock Exchange (“AMEX”), and the Chicago Board Options Exchange (“CBOE”). In short, Attorney Pearce has knowledge and skill gained over [40] years of specialized training on the minutiae of broker-dealer practices and procedures and SEC enforcement proceedings which could not be obtained by a competent practicing attorney through routine research or legal experience.”
Attorney Pearce has successfully defended clients involved in CFTC informal inquiries, formal investigations and enforcement actions since the mid-1980s from his South Florida offices. He has faced the CFTC in its many sweeps of Commodities Option brokerages, Off-Shore FOREX companies, Leveraged and Cash-only Precious Metals firms, Futures Commission Merchants and small Introducing Brokerage firms over his 40 year career.
Attorney Pearce works closely with in-house legal and management teams to achieve the client’s ultimate objective and avoid prosecution. It is essential, at the outset of any new commodities investigation or enforcement action, to identify a sound strategy that is calculated to lead to a speedy and favorable resolution. In some cases, it is advisable to work cooperatively with the government; in other cases, a more defensive posture is appropriate. Regardless of the strategy, Mr. Pearce is a lawyer who has a reputation for credibility and effectiveness in his dealings with government investigators.
MR. PEARCE IS AN EXPERIENCED PRECIOUS METALS DEFENSE ATTORNEY
The commodities environment has become more challenging with the Dodd-Frank Amendments and increased authority granted to the CFTC and its Division of Enforcement. As a result, the CFTC has shown unprecedented aggressiveness in its investigations of trading activity in the nation’s commodity markets. The precious metals brokerage business has become the focus of the CFTC and other regulators’ attention in South Florida and nationwide. Before the Dodd Frank Amendments became effective, Mr. Pearce successfully defended clients in the leveraged precious metals business because the CFTC had “no jurisdiction” over the businesses anywhere in the United States prior thereto.
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