The Commodity Futures Trading Commission (CFTC) today issued two concurrent filing and settlement orders against US Bank, NA, a swap dealer, and Oppenheimer & Co., Inc., an import broker, for failure to maintain and maintaining records required to be kept under CFTC recordkeeping requirements and failing to diligently oversee matters related to their businesses as CFTC registrants.
Registrants who settle admit the facts detailed in the orders, are ordered to cease and desist from further violations of recordkeeping and oversight requirements, and are ordered to comply with specified remedial undertakings.
The orders require US Bank to pay a civil monetary penalty of $6 million and Oppenheimer to pay a civil monetary penalty of $1 million.
According to the orders from at least 2019 to the present, both US Bank and Oppenheimer failed to prevent employees, including those at senior levels, from communicating using unauthorized communication methods, including private text messages.
The companies were required to comply with some of these written communications because they related to the company’s CFTC-registered businesses. These written communications were generally not maintained and preserved by either company, and neither company generally would be able to provide them promptly to the CFTC if and when requested.
Each order further found that the company-wide use of unauthorized communication methods violated each company’s internal policies and procedures, which generally prohibited business-related communication through unauthorized methods. In addition, some of the supervisory personnel responsible for ensuring compliance with company policies and procedures also used unauthorized communication methods to engage in business-related communications in violation of company policy.
As of December 2021, the CFTC has imposed $1.124 billion in civil monetary penalties against 22 financial institutions for using unapproved communication methods in violation of the CFTC’s recordkeeping and oversight requirements.