This speech by CFTC Director of Enforcement David I. Miller outlines the Division's five core enforcement priorities for 2026—insider trading (especially in prediction markets), market manipulation, market abuse/disruptive trading, retail fraud, and willful AML/KYC violations—while announcing the end of "regulation by enforcement" and previewing a new cooperation policy with enhanced declination incentives. It matters because it signals a targeted, risk-based enforcement shift under Chairman Selig, emphasizing fraud detection over rulemaking, which demands immediate strengthening of surveillance, insider policies, and self-reporting in derivatives, crypto, and prediction markets. Firms face heightened scrutiny in these areas, with cooperation now explicitly tied to penalty mitigation.
What Changed
- - End of "regulation by enforcement": CFTC Enforcement will focus solely on policing fraud, abuse, and manipulation under existing CEA anti-fraud provisions, avoiding policy-setting via enforcement...
- Five explicit enforcement priorities:
1. Insider trading, with strong emphasis on prediction markets (e.g., misappropriation of nonpublic information violates CEA).
2.
- New cooperation policy advisory (forthcoming soon): Includes "significant changes" to declination policy, building on prior frameworks like mitigation-credit matrices and safe harbors for...
Suggested Considerations
- Enhance surveillance: Implement robust monitoring for insider trading in prediction markets, manipulation in energy, disruptive trading, retail fraud signals, and AML/KYC red flags; prioritize misappropriated nonpublic info detection.
- Update policies: Revise insider trading protocols to align with CEA anti-fraud provisions; train staff on prediction market risks (debunking "no insider laws apply" myth).
- Strengthen cooperation readiness: Develop self-reporting/escalation processes, remediation plans, and documentation for declination credit under forthcoming policy; review prior CFTC advisories (e.g., 2025 mitigation matrix).
- Conduct gap analysis: Audit AML/KYC programs for willful violations; assess exposure in priority markets (energy, prediction/crypto, retail).
- Monitor updates: Subscribe to CFTC Press Room for cooperation advisory and related actions (e.g., Feb 25, 2026 Prediction Markets Advisory post-enforcement cases: https://www.cftc.gov/PressRoom/PressReleases/9185-26).
Key Dates
Speech delivery; Outlines priorities and previews new cooperation policy advisory
New cooperation policy advisory issuance; Expected imminently; firms should monitor CFTC site for formal release
Compliance Impact
Urgency: High – This immediate post-appointment speech (March 31, 2026) sets 2026 priorities amid CFTC's expanding oversight of dynamic markets like prediction/crypto/swaps, with Director Miller's prosecutor background signaling aggressive pursuit of "serious violations." Firms risk enforcement in core fraud areas without proactive surveillance/cooperation; aligns with "back-to-basics" trends but elevates prediction market insider risks, demanding swift program updates to leverage new declination incentives.