Insider trading is a familiar term to participants in the equities markets; however, this term now has application in the swaps, futures, and commodities markets regulated by the U.S. Commodity Futures Trading Commission (CFTC). In a time of aggressive enforcement, financial market participants should be aware that insider trading is a high priority for the CFTC enforcement program. The CFTC demonstrated its active pursuit of insider trading with its first insider trading case in October of 2015. This watershed moment was not a single event. Just recently, on September 29, 2016, the CFTC brought its second insider trading case, further demonstrating the agency’s utilization of this new enforcement tool. In this alert, we provide a detailed review of the CFTC’s insider trading enforcement activity to date, as well as analogous securities case law, to provide insight into its continued application in the derivatives markets. Market participants should consider the application of these recent CFTC insider trading enforcement actions to their business, including a review of trading procedures, internal control systems (including access to trading strategies), and compliance programs, in order to minimize the risk of a CFTC insider trading enforcement action.

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