Former chief trial attorney Liz Pendleton questions the agency’s enforcement retreat as Michael Selig reaches for more authority over crypto and prediction markets.
ELMHURST, IL (JLN) — September 18, 2026: Liz Pendleton, former CFTC chief trial attorney in Chicago, where she worked for the CFTC for more than 15 years, asked in a LinkedIn post, “What is happening with CFTC Enforcement?”
My answer involved quantum mechanics, Hawking Radiation, thermodynamics, and astrophysics, and came back in the form of a question. What happens in a Black Hole?
Pendleton writes,
“In the year since the agency reduced its enforcement staff by RIF’ing management in Chicago and New York, the CFTC has filed 11 enforcement actions. Six administrative settlements and five federal complaints, all authorized by a single individual – the sole Commissioner and Chair.”
We know who that is: Michael Selig, the Commissar of the CFTM, or Commodity Futures Trading Monolith, as I wrote back in June.
Pendleton continues with specific cases:
“Those actions have generally targeted individual rogue actors. Last month, the Chair approved a settlement with a White House teleprompter operator who misappropriated material, nonpublic information to trade in event contract mention markets and, due to his “exemplary cooperation,” imposed a significantly reduced monetary penalty.”
The teleprompter operator got caught red-handed, and this veteran enforcement attorney knows when prosecution is giving away the gifts.
“In July, the Chair approved a neither-admit-nor-deny settlement with a former Congressman who exclusively traded a SOTU contract regarding his attendance at that event while concurrently posting inaccurate statements about his travel plans on X, and the Chair imposed a monetary penalty at the lower end of the guidance.”
George Santos makes Jim Carrey’s and Jeff Daniels’s characters from the Dumb and Dumber movies look like MIT scholars. Selig lets the former Republican congressman off easy because there are no other commissioners at the commission to question Selig’s bad judgment.
“Two of the five federal complaints the agency filed involve CPO fraud, one alleges a large Ponzi scheme, and two others charge insider trading in prediction markets.”
Looking into CPOs without stumbling across fraud is like walking through a toddler’s bedroom in the dark: you’re bound to hit something. Same goes for the Ponzi scheme. Too many complaints about Ponzi schemes come into the commission for one not to hit occasionally. The surprise is the sparse number of insider trading cases in prediction markets in a world that thinks the CFTC enforcement division has gone to sleep.
“Only one of the eleven actions filed touches on illicit finance, although the Division Director has identified violations of anti-money laundering (AML) and know-your-customer (KYC) laws and rules as a key enforcement priority.”
This is kind of like prioritizing voting fraud violation enforcement in Russia. There is no fraud because the state is committing it.
“A robust enforcement program protects those who prohibit self-dealing, guard against money laundering, and otherwise dedicate resources to protecting U.S. customers by investing in compliance by deterring bad actors and others who ignore compliance with Core Principles in favor of profit.”
You have a CFTC chairman who endorses self-dealing, has examples of money laundering right in front of his face, and witnessed the biggest pump-and-dump in memecoins in history. Selig’s core principles involve promoting the president’s interests and little more.
“This is because a meaningful commitment to promoting market integrity requires that those who break the rules be held to account.”
I wonder if Selig has seen any “Treason, Bribery, or other high Crimes and Misdemeanors.”
“In recent days, my former agency has touted its existing authority as it is “ready to ship its [crypto] rules” and further expand its jurisdiction over all flavors of event contracts. One can only hope the Division of Enforcement has sufficient resources and expertise to support the CFTC as it moves forward with these efforts, while continuing to oversee the traditional derivatives markets.”
I get the feeling that the CFTC enforcement division is like a U.S. Army Division that is on paper only and has no soldiers, only a division insignia. I admire Pendleton’s measured skepticism with a pointed warning about regulatory overreach and strained resources. However, one constant is that the job the CFTC is charged with is never commensurate with the resources Congress gives it to do it.
