CFTC Enforcement:

Actions Taken to Strengthen the Division of Enforcement

GGD-98-193: Published: Aug 28, 1998. Publicly Released: Aug 28, 1998.

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Pursuant to a congressional request, GAO reviewed: (1) the changes made to the Commodity Futures Trading Commission's (CFTC) Division of Enforcement, including the views of enforcement staff on areas in which changes were made; (2) further opportunities for improvement, if any, in these areas; and (3) other available information that might indicate CFTC's commitment to its enforcement program.

GAO noted that: (1) following the completion of CFTC's internal review, the Division of Enforcement made numerous organizational, operational, and other changes related to the review findings; (2) these changes included reorganizing headquarters and two of its three regional offices, providing additional training, expanding written guidance on investigations and litigation, revising the review process for recommendations made to the Commission, increasing communication between management and staff, emphasizing the importance of equal employment opportunity, and modernizing recordkeeping systems; (3) its survey of a judgmentally selected sample of about half of the division's headquarters and regional office professional staff showed that, in areas where changes were made, the surveyed staff viewed the division's current organization and operations more positively than negatively; (4) however, the views of headquarters staff were consistently more positive than those of regional office staff; (5) while GAO could not assess whether the division's changes had their intended effect, further opportunities exist to strengthen the division in two areas where changes were made; (6) although the division has provided additional training to staff, it does not have a mechanism to ensure that staff training needs are systematically assessed and addressed; (7) the division does not have a formal training plan for identifying the areas in which training is needed, providing such training, and tracking the training staff receive; (8) the division has reviewed and updated its procedures manual, but the manual does not address all of the major policies and procedures related to the division's investigation and litigation process; (9) in addition to the division's changes, available information indicates that CFTC is committed to its enforcement program; (10) industry officials contacted view the agency as taking a more aggressive stance against violators of the Commodity Exchange Act; and (11) a substantial majority of the surveyed enforcement staff viewed the division as operating effectively and efficiently as well as producing quality work.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Deputy Director of CFTC's Division of Enforcement told GAO that the division has taken informal action to assess the differences in staff opinions with respect to HQ and regional staff. For example, division management has had discussions with regional staff and their supervisors. However, he said that the division has not conducted, nor does it plan to conduct, a staff survey similar to the one that GAO conducted.

    Recommendation: The Chairman, CFTC, should assess the reasons behind the differences in views between Division of Enforcement headquarters and regional office staff in the areas where changes were made to determine whether opportunities exist for further improvements.

    Agency Affected: Commodity Futures Trading Commission

  2. Status: Closed - Implemented

    Comments: The Deputy Director of CFTC's Division of Enforcement told GAO that the division has developed and implemented a training plan to identify areas in which each staff needs training, to provide such training, and to track staff training. The plan was developed in late 1999 by a special committee appointed by the division and implemented in the Spring of 2000.

    Recommendation: The Chairman, CFTC, should develop a formal training plan for the Division of Enforcement that includes a strategy for: (1) identifying areas in which staff need training; (2) providing staff with this training; and (3) tracking and assessing the training staff receive.

    Agency Affected: Commodity Futures Trading Commission

  3. Status: Closed - Implemented

    Comments: The Deputy Director for CFTC's Division of Enforcement told GAO that it has developed an electronic procedures manual that is available on the agency's intranet. The manual became available at the end of August 1999.

    Recommendation: The Chairman, CFTC, should expand the Division of Enforcement's procedures manual to include all of the division's major policies and procedures applicable to its investigative and litigation processes.

    Agency Affected: Commodity Futures Trading Commission


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