- CFTC Acting Chair Caroline Pham announces major reorganization of enforcement division
- Previous multiple task forces consolidated into just two: Complex Fraud and Retail Fraud
- Move marks explicit end to “regulation by enforcement” strategy
- Paul Hayeck to lead Complex Fraud Task Force, Charles Marvine to head Retail Fraud
- Change mirrors SEC’s recent shift under Acting Chair Mark Uyeda
The U.S. Commodity Futures Trading Commission (CFTC) has announced a major reorganization of its enforcement division, marking a clear departure from previous regulatory strategies. Under the leadership of Acting Chair Caroline Pham, the agency is consolidating its various task forces into just two main units, with a renewed focus on preventing fraud.
The restructuring eliminates several specialized task forces that operated under former Chairman Rostin Behnam, including units dedicated to insider trading, cybersecurity, emerging technologies, and environmental fraud. In their place, the CFTC has created two streamlined task forces: the Complex Fraud Task Force and the Retail Fraud and General Enforcement Task Force.
Paul Hayeck, a deputy director of the enforcement division, will serve as acting chief of the Complex Fraud Task Force. This unit will handle all aspects of complex fraud cases, from initial inquiries through to litigation, covering all asset classes within the CFTC’s jurisdiction.
The Retail Fraud and General Enforcement Task Force, to be led by Deputy Director Charles Marvine, will focus on retail fraud cases and oversee general enforcement of the Commodity Exchange Act. This reorganization aims to create a more efficient structure for addressing different types of market misconduct.
Acting Chair Pham has explicitly stated that the new structure will “stop regulation by enforcement,” referring to a regulatory approach that has drawn criticism from many in the financial industry. The change reflects a desire to shift away from using enforcement actions as a primary means of establishing regulatory policy.
Brian Young, CFTC Acting Director of Enforcement, emphasized that fraudsters continue to develop new tactics to exploit market participants. He stated that the task force realignment will strengthen the agency’s ability to secure justice for victims and maintain public confidence in market integrity.
The reorganization is designed to maximize the CFTC’s resources, allowing the agency to pursue more actions against fraudsters and bad actors while avoiding what Pham called the punishment of “good citizens.” This approach suggests a more targeted enforcement strategy focused on clear cases of fraud rather than broader regulatory interpretation through enforcement actions.
The change at the CFTC mirrors similar reforms at the Securities and Exchange Commission (SEC), where Acting Chair Mark Uyeda has established a dedicated Crypto Task Force and moved away from the regulation by enforcement strategy employed under former Chair Gary Gensler.
Under the new structure, the CFTC aims to enhance governance and oversight of enforcement matters. The agency has stated that these changes will help prevent overreach and promote consistency, fairness, and due process in its enforcement activities.
The Complex Fraud Task Force will take on cases involving sophisticated schemes and market manipulation across all asset classes. This consolidated approach replaces the previous system of multiple specialized units, potentially allowing for more flexible resource allocation.
The Retail Fraud and General Enforcement Task Force will handle cases involving individual investors and ensure compliance with the Commodity Exchange Act. This unit’s creation reflects the CFTC’s commitment to protecting retail market participants while maintaining market integrity.
The reorganization represents a streamlining of the CFTC’s enforcement capabilities, reducing administrative complexity while maintaining comprehensive market oversight. The agency believes this will lead to more effective fraud prevention and enforcement actions.
According to the CFTC’s announcement, the new structure will better leverage staff expertise and resources to prevent fraud, manipulation, and abuse while ensuring market integrity. The changes are intended to create a more efficient and focused enforcement program.
The timing of this reorganization comes as regulatory agencies face increasing pressure to provide clear guidelines for emerging financial technologies and markets. The CFTC’s move suggests a shift toward more predictable and systematic enforcement approaches.
