The CFTC and the DOJ both now pursue enforcement actions against trading in commodities based on misappropriation of confidential information.

By Douglas K. Yatter, Sohom Datta, and Cameron J. Sinsheimer

Among the many changes resulting from the Dodd-Frank Act, one that has been slow to develop, but broad in its significance, is the assertion of authority by the CFTC to police insider trading in commodities markets. Starting in 2015, the agency began bringing enforcement actions against individuals and companies for trading based on misappropriation of confidential information. Since then, the CFTC has brought a series of actions that provide insight on the scope of its new authority, and it has devoted substantial resources to pursuing new cases. The DOJ is now focusing on this topic as well.

This Client Alert provides an overview of this evolving area of enforcement, summarizes recent cases, and highlights key developments, including the advent of “tipper-tippee” cases, the use of data analytics to identify potential misconduct, and the emergence of parallel criminal enforcement actions.