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The FY 2012 Budget for the Office of Proceedings is $2,912,000 and 10 FTE. No additional resources are requested to implement Dodd-Frank.

The Office of Proceedings is responsible for providing an inexpensive, impartial, and expeditious forum for handling customer complaints against persons or firms registered under the CEA. In FY 2012, the Office of Proceedings requests 10 FTE.

The Complaints section of the Office of Proceedings receives and prepares customer claims for action by appropriate officials, dismissing those that are outside the jurisdiction of the Commission or are pending in another forum. The Hearings section includes judgment officers (JOs), who decide reparations complaints in voluntary and summary proceedings and administrative law judges (ALJs), who conduct formal proceedings.

The ALJs also decide administrative enforcement cases brought by the Commission against persons or firms responsible for violating the CEA or Commission regulations.

The Office of Proceedings receives approximately 50 reparations cases per year and will respond to approximately 4,000 telephone inquiries and requests. Inquiries from members of the public include questions from those considering investing in commodity futures and options, and questions about specific firms and whether or not they have had customer complaints filed against them. Information is also provided about how to utilize the CFTC complaints process.

The Office of Proceedings maintains a case-tracking system that tracks the progress of each case from receipt of complaint through disposition, including any appeal to the Commission or Federal court. The case-tracking system not only assists with case management within the Commission, but it also enables the Office of Proceedings to provide current information on the status of cases in response to public inquiries.

The Office of Proceedings maintains the Reparations Sanctions in Effect List publication, a record of individuals and firms that have not paid reparations awards. This document is published as needed. The Office of Proceedings also maintains the Administrative Sanctions in Effect List publication, a record of individuals and firms that have outstanding against them enforcement sanctions, such as trading prohibitions. This document is also published as needed. These lists are made available to the public on the Commission’s Web site and are distributed to the exchanges via email, the NFA, the Futures Industry Association, the National Association of Securities Dealers, and the SEC for use in their compliance efforts.

In FY 2012, the Office of Proceedings is requesting 10 FTE, which is the same as the FY 2011 level. For a variety of reasons, the workload of the Office of Proceedings has declined. The reparations program volume swelled during the first few years of operation, from 25 cases pending at the end of 1976 to 1,203 pending at the end of 1980. Amendments to the CEA by the Futures Trading Act of 1982 allowed complaints only to be brought against registrants. Volume began to diminish following the effective date of the rules implementing those amendments in 1984, with a significant drop beginning in 1990. The number of complaints has leveled out at about 60 complaints per year. The decline may be attributable to a number of factors including the effectiveness and shorter time frame of the NFA arbitration and mediation program, which was established in 1983, and a decline in the number of firms holding customer accounts.

Similarly, the Commission’s use of the administrative enforcement forum has declined. No administrative cases are currently pending before the Commission’s ALJs. Like other Federal regulatory agencies, the CFTC primarily brings cases in Federal District Court in order to seek injunctive and other relief not available in the administrative forum and to take advantage of more advantageous discovery rules.

As a result of this decline, the CFTC does not see a reason to request expanded resources at this time.

Proceedings Request by Subprogram
($ in thousands)

Subprogram	FY 2011		FY 2012		Change
	Budget	FTE	Budget Request	FTE	Budget	FTE
Enforcement	$712	3.00	$874	3.00	$162	0.00
Reparations	1,660	7.00	2,038	7.00	378	0.00
TOTAL	$2,372	10.00	$2,912	10.00	$540	0.00

Dodd-Frank Included Above in Proceedings Request
($ in thousands)

Program Activity	FY 2011		FY 2012		Change
	Budget	FTE	Budget Request	FTE	Budget	FTE
Dodd-Frank	$0	0.00	$0	0.00	$0	0.00
TOTAL	$0	0.00	$0	0.00	$0	0.00

Office of Proceedings FY 2012 Budget by Subprogram

Subprogram	Percentage
Enforcement	30%
Reparations	70%

Proceedings Request by Goal
($ in thousands)

Outcomes	FY 2011		FY 2012		Change
	Budget	FTE	Budget Request	FTE	Budget	FTE
GOAL ONE: Protect the economic functions of the commodity futures, options and swaps markets.
None
GOAL TWO: Protect market users and the public.
2.1 Violations of Federal commodities and swaps laws are detected and prevented.	$712	3.00	$874	3.00	$162	0.00
2.2 Commodity professionals to meet high standards.	0	0.00	0	0.00	0	0.00
2.3 Customer complaints against persons or firms falling within the jurisdiction of the Commodity Exchange Act are handled effectively and expeditiously.	1,660	7.00	2,038	7.00	378	0.00
Subtotal Goal Two	$2,372	10.00	$2,912	10.00	$540	0.00
GOAL THREE: Foster open, competitive, and financially sound markets.
None
TOTAL	$2,372	10.00	$2,912	10.00	$540	0.00

 

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