Long-Arm Powers for the CFTC

The Commodity Futures Trading Commission (CFTC) is seeking, under the US Commodity Exchange Act (CEA), new powers to subpoena witnesses and documents located abroad in connection with CFTC investigations in the US. The CFTC proposes to amend the CEA to add international authority to its sweeping domestic subpoena power. The CFTC tried to serve a subpoena in Brazil, but the court invalidated it, claiming such service would infringe on the principles of international law and that the CFTC exceeded the literal language of the CEA. According to the CFTC, this has, in effect, created a safe haven for would-be violators of the CEA. The CFTC does receive routine reports from foreign traders and can issue a special call, which gives it an extraordinary surveillance power over foreign traders. When a non-US person fails to comply with the commission's information requests, even the most severe CFTC sanctions fall short of ensuring actual receipt of the desired material. It is on this basis that the CFTC urges Congress to give it international subpoena power.