How Does the Commodity Futures Trading Commission Work?

Commodity Futures Trading Commission work

The stock market has evolved, and new trading practices have been introduced to cater to different goods and services. The CTFC was created in 1974 by the US congress as an independent federal regulatory agency. The CFTC is tasked with regulating the US derivatives markets. Let’s see how does the commodity futures trading commission work.

The CTFC promotes competitive and efficient futures markets and protects investors against manipulation, illegal trade practices, and fraud. Any person with information about an individual or company engaging in illegal trade practices can report to the commission through a CFTC whistleblower lawyer. The CFTC is playing an important part in reducing fraud in the futures markets. 

Here is a breakdown of how the CFTC carries out its functions:

Table of Contents

Different Committees

The CFTC has five committees headed by commissioners appointed by the president of the United States. These committees have specific areas to focus on. These areas include agriculture, technology, energy and environment markets, and global markets cooperation between the CFTC and SEC. The committees are occupied by individuals such as traders and consumers. 

Regulating the Futures Markets

The CFTC requires all parties who wish to trade in the foreign exchange or make trades on behalf of other people to be registered with them. All individuals and companies that want to trade must make their statements of risk public and be honest about their dealings in the futures trading environment. The public needs to be aware of all the risks that come with trading in the futures markets.

Violations the CFTC Prevents 

The CFTC has a department that investigates violations, known as the Division of Enforcement, which investigates violations of the Commodity Exchange Act and the CFTC Regulations. The violations of the Commodity Exchange Act may include the following:


Fraud involves the use of illegal means to gain funds from investors. Examples of fraud include Ponzi schemes, misappropriations of investor funds, issuing of false customer accounts, among others. Investors lose millions of dollars to fraudulent individuals, and the division of enforcement will investigate and prosecute all those who take part in fraudulent activities. 

Illegal Trade Practices

The CFTC regulations provide the traders with a legal and ethical way of trading in the futures markets. However, some traders might use illegal means to gain an unfair advantage over other investors. 

The commission prevents some of the illegal trade practices: fictitious sales, unauthorized swap transfers, violation of position limits, and inadequate oversight of traders.

Manipulating the Market

Some individuals or companies will attempt to manipulate the market to suit their options. An example of trying to manipulate the market is using fictitious and non-competitive transactions. The individual presents non-existent records that make other traders or companies believe the company is doing well in the market. 

Whistleblowing to the CFTC

The CFTC has a whistleblowing program that provides monetary incentives to individuals who report violations of the Commodity Exchange Act. The program provides privacy and also includes an anti-retaliation program. To become a CFTC whistleblower, you need to have original and accurate information that has yet to reach the public.  

You can fill in the information on the CFTC whistleblower program’s website, or use a CFTC whistleblower attorney to represent you. The advantage of using a CFTC whistleblower attorney is that you do not have to include your name in the TCR form. The CFTC will conduct its investigations, and if the party is found guilty of violating the CEA, you might receive an award. You can receive an award if the monetary sanctions exceed $1 million. 

Find a CFTC Whistleblower Attorney

If you have information on an individual or company that can lead to a successful CFTC action, you should report it to the commission. You could get a decent amount of money as an award for your actions. Reach out to an experienced CFTC whistleblower attorney for legal advice and representation.


Please enter your comment!
Please enter your name here