Why U.S. Regulators Must Lead the Global Fight

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The U.S. is known for enforcing significant penalties for financial misconduct. eflow Global’s report on global trade surveillance revealed that 205 fines worth $2.92 billion were levied for market abuse between 2019 and 2023 (Q3). U.S. regulators accounted for 133 of these fines – more than five times as many enforcements as any other region – with a total value of $2.67 billion, representing 91 percent of all financial penalties.

It should be noted that the Commodity Futures Trading Commission (CFTC) fining JP Morgan $920.2 million in 2020 significantly shifts this value upwards for the time period in question. However, even excluding this outlier, the U.S. consistently issues the largest fines by some significant margin.

Not only is the country a regulatory leader in enforcing fines but also in terms of implementing new enforcement strategies, such as taking action against instances of non-compliant eComms (electronic communications) surveillance. There have been recent examples of substantial fines related to unmonitored communication channels, while enforcements for conduct relating to digital assets represented more than 20 percent of all CFTC actions filed during the 2022 fiscal year.

Does money talk?

Why does the U.S. sit at the top of the table for market abuse fines?

One reason is strategy. U.S. regulators still see the threat of huge fines as a significant deterrent for firms, as it not only impacts the bottom line of the company but also carries the risk of reputational damage. In the eyes of the regulators, without the threat of such hard-hitting penalties, market abuse has the potential to be an increasingly prevalent problem. This type of enforcement strategy is strongly embedded into U.S. culture. But it is far from a universal tactic.