On August 14, the CFTC issued an order simultaneously filing and settling charges against a swap dealer (the respondent) for allegedly violating the Commodity Exchange Act and related regulations. The order stated the bank self-reported these violations based during an internal audit. Specifically, from December 2019 to the present, the respondent failed to maintain required records, used unapproved communication methods, and inadequately supervised its swap dealer activities. Furthermore, the respondent’s employees (including senior personnel) used personal text messages and other unapproved methods of communication for business purposes, and such communications were not preserved or monitored (as required by the CFTC). This failure to maintain records and supervise employees specifically led to violations of Sections 4s(f)(1)(C), 4s(g)(1) and (3), and 4s(h)(1)(B) of the Commodity Exchange Act, among others. 

The offer of settlement, which the CFTC accepted, included the respondent admitting to the violations, agreeing to pay a civil monetary penalty of $3 million, and committing to cease and desist from further violations. Additionally, the respondent will conduct a review of its supervisory and compliance policies related to electronic communications and will implement changes to ensure future compliance.