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2020 University of Chicago Law Review Online 15 (2020)


On March 6, 2019, the Commodity Futures Trading Commission (CFTC) announced that it would be taking an active role in prosecuting violations of the Commodities Exchange Act (CEA) that involve foreign corruption.[11 On the same date, the CFTC published an enforcement advisory further signaling its intention to investigate and prosecute violations of the laws and regulations of the CEA linked to foreign corrupt practices, such as violations of the Foreign Corrupt Practices Act (FCPA). The FCPA prohibits US-based businesses from engaging in corrupt practices, such as bribery, in foreign countries in which they do business. Currently, both the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) vigorously and vigilantly enforce the FCPA. How and to what extent, therefore, would the involvement of the CFTC impact the prosecution of FCPA violations?

This Essay explores this question by focusing on two specific inquiries. First, this Essay examines what kinds of foreign corrupt practices could overlap with the CFTC's jurisdiction. The CFTC is the exclusive regulator of the derivatives and commodities market, and one of its primary concerns is to deter and detect market manipulation. In turning its focus to foreign corrupt practices that violate the CEA, one implication is that there is a connection between foreign corruption and manipulation of the US derivatives and commodities markets. Exploring how foreign corruption can manifest into market manipulation, therefore, is important to understanding the potential types of conduct that may warrant CFTC attention. Second, this Essay assesses the implications of the CFTC's foray into the prosecution of foreign corruption. For example, with the addition of another regulator to the FCPA's enforcement roster, derivatives and commodities market participants likely face FCPA-related compliance requirements that they did not previously have. Part I of this Essay begins with an overview of the FCPA. It describes the purpose of the FCPA and the enforcement approach of the DOJ and SEC in relation to the Act.

Part I also summarizes the CFTC's role in the financial markets and its traditional jurisdictional scope. Part II examines three potential scenarios in which foreign corruption could result in manipulation of the US derivatives and commodities markets. Part III considers the implications of the CFTC's involvement in the enforcement of the FCPA and, lastly, raises additional questions that may prove fruitful for future research.

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