US Market Regulators Vow to Maintain Core Enforcement

In the ever-evolving landscape of global financial markets, the United States has consistently maintained a robust regulatory framework to ensure market integrity and protect investors. The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are the primary market regulators in the US, responsible for enforcing securities laws and derivatives regulations, respectively. In recent years, these regulators have demonstrated a commitment to consistent enforcement, as evidenced by the significant fines and penalties imposed on market participants for various financial violations.



One of the key measures implemented by US market regulators to maintain consistent enforcement is the imposition of substantial fines for market manipulation and other financial violations. Between Q1 2019 and Q3 2023, US regulators issued 133 fines amounting to $2.67 billion, with an average fine of $13.2 million (excluding a $920 million fine imposed on JP Morgan Chase and Co.). This aggressive stance has been effective in deterring unlawful trading practices and maintaining market integrity. For instance, Lek Securities was fined twice for manipulative trading practices in 2019, demonstrating the regulators' commitment to addressing these issues.

Another area of focus for US regulators is the enforcement of short selling-related fines. FINRA, the Financial Industry Regulatory Authority, consistently enforced short selling fines in the observed period, accumulating $21.6 million across 15 fines. The SEC also issued $20.9 million in short selling fines, despite enforcing only five penalties. The Bank of America faced three fines from FINRA for short selling violations, totaling $2.45 million, highlighting the regulators' dedication to addressing this issue.

In the commodities market, the CFTC has bolstered its enforcement efforts, targeting manipulation and spoofing actors. In 2023, the CFTC recorded a record number of penalties targeting these activities, underscoring the regulator's dedication to maintaining market integrity in this sector. For example, in March 2023, the CFTC fined a trader $1.6 million for engaging in a spoofing scheme in the precious metals futures market.

These enforcement actions have been effective in maintaining market integrity, as evidenced by the significant disparity in enforcement approaches between the US and other global regulators. While the US led in both the volume and severity of fines for market abuse, other regions, such as APAC, adopted a more reserved enforcement approach, reflecting cultural values that emphasize individual accountability and societal harmony over public reprimand.

In conclusion, US market regulators have implemented several measures to ensure consistent enforcement of financial regulations and maintain market integrity. These measures, including substantial fines and targeted enforcement actions, have been effective in addressing market abuse risks and protecting investors. As the global financial landscape continues to evolve, US regulators remain committed to maintaining a robust regulatory framework that ensures market integrity and protects investors.