[ by Howard Haykin ]

The U.S. Commodity Futures Trading Commission announced today, Friday, that 2012 was a record setting year.  The agency filed the highest number of enforcement actions in its 38-year history.  The CFTC filed 102 enforcement actions in its fiscal year ended 9/30/12, up slightly from the 99 actions it filed in 2011, and a big boost over the 57 cases filed in 2010. 

That is wonderful news for the CFTC, which appears to have "come out of its shell" and taken its place alongside the SEC as a leading regulator in the financial markets.   Credit for this turnaround is largely due to the leadership of former Goldman Sachs partner, Commissioner Gary Gensler. 

And yet, while 2012 has undoubtedly has been the best of years for the CFTC, it also can be viewed as perhaps the worst of years. 

On the plus side, besides the record-breaking number of enforcement actions, the CFTC will forever look to its settlement with Barclays that the Agency jointly negotiated with the U.K.'s FSA.  The CFTC and the FSA each took home record fines in a case that has rocked the world - Manipulation of the Libor Interest Rate by Barclays and allegedly many other global banks.

News of the settlement was enough for Republican Congressmen and women to halt their complaining about the Dodd-Frank rules that the CFTC was proposing and trying to implement.  The Republicans went so far as to recommend that the CFTC receive an increased budget allocation - following weeks and months of trying to halve that same operating budget.  Yet, as far as we know, nothing concrete has come out of that euphoric period. 

The worst of times follows what we were just talking about - constant criticism of the Agency each time Commissioner Gensler attempted to propose or implement a new rule that had been mandated by Dodd-Frank.   As noted above, the earlier talk on Capital Hill was that the CFTC's budget should be halved - notwithstanding its added workload with new regulations and the CFTC's obligation to oversee much of the OTC swaps market. 

Cases That Made 2012.   The CFTC set off fireworks on both sides of the Atlantic.  Besides its settlement in London with Barclays, the CFTC also filed charges against Peregrine Financial Group, the futures brokerage that filed for bankruptcy in July after its chief executive, Russell Wasendorf Sr., attempted suicide and admitted to bilking customers out of millions of dollars.  The CFTC also has been working alongside federal prosecutors and just about every other regulator on bankrupt brokerage firm, MF Global.   The commission has yet to file charges in this case - either against the firm or its management team, and no one has solved the mysterious $1.6 billion in customer funds that is still unaccounted for. 

And so, if the CFTC opened 350 new investigations in 2012,  and obtained orders imposing more than $585 million in sanctions, just imagine what 2013 will bring.

For further details, go to:  [Reuters, 10/5/12].