Foreign Corruption As Market Manipulation

12 Pages Posted: 26 Aug 2019

Date Written: 2019


On March 6, 2019, the Commodity Futures Trading Commission (“CFTC”) announced that it would be taking an active role in prosecuting violations of the Commodities Exchange Act (“CEA”) that involve foreign corruption.1 On the same date, the CFTC published an enforcement advisory further signaling its intention to investigate and prosecute violations of the laws and regulations of the CEA linked to foreign corrupt practices, such as violations of the Foreign Corrupt Practices Act (“FCPA”).2 The FCPA prohibits U.S.-based businesses from engaging in corrupt practices, such as bribery, in foreign countries in which they do business.3 Currently, both the Department of Justice (“DOJ”) and the Securities and Exchange Commission (“SEC”) vigorously and vigilantly enforce the FCPA. How and to what extent, therefore, would the involvement of the CFTC impact the prosecution of FCPA violations?

This Essay explores this question by focusing on two specific inquiries. First, this Essay examines what kinds of foreign corrupt practices could overlap with the CFTC’s jurisdiction. The CFTC is the exclusive regulator of the commodities market and one of its primary concerns is to deter and detect market manipulation.4 In focusing on foreign corrupt practices that violate the CEA, the CFTC is asserting that foreign corruption may result in manipulation of the US commodities market. Exploring how that can manifest is important to understanding the potential scope of the CFTC’s involvement in FCPA enforcement. Second, this Essay assesses the implications of the CFTC’s foray into the prosecution of foreign corruption. For example, with the addition of another regulator to the FCPA’s enforcement roster, commodities market participants likely face FCPA-related compliance requirements that they did not previously have.

Part I of this Essay begins with an overview of the FCPA. It describes the purpose of the FCPA and the enforcement approach of the DOJ and SEC in relation to the Act. Next, Part I summarizes the CFTC’s role in the financial markets and its traditional jurisdictional scope. Part II examines three potential scenarios in which foreign corruption could result in manipulation of the US commodities markets. It also assesses whether existing anti-manipulation laws are broad and robust enough to encompass this intersection of the foreign corruption and market manipulation. Part III considers the implications of the CFTC’s involvement in the enforcement of the FCPA and, lastly, raises additional questions that may prove fruitful for future research.

Suggested Citation

Fletcher, Gina-Gail S., Foreign Corruption As Market Manipulation (2019). University of Chicago Law Review, Forthcoming. Available at SSRN:

Gina-Gail S. Fletcher (Contact Author)

Indiana University Maurer School of Law ( email )

211 S. Indiana Avenue
Bloomington, IN 47405
United States

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