Washington D.C. – Canadian Imperial Bank of Commerce (CIBC) has been slapped with a $30 million penalty by the Commodity Futures Trading Commission (CFTC) for failing to adequately maintain records and supervise employee communications, the agency announced Monday.
The CFTC order details that CIBC, a major swap dealer, violated recordkeeping and supervision requirements from at least September 2018 through the present. The core of the violation centered on employees – including those in senior positions – utilizing unapproved communication methods, specifically personal text messages, for business related to CIBC’s CFTC-registered activities.
These communications were not preserved by CIBC as required by CFTC regulations, hindering the firm’s ability to promptly provide the information to regulators if requested. The use of these unofficial channels also directly violated CIBC’s internal policies, which generally prohibited such communication.
Notably, the order highlights that supervisory personnel tasked with enforcing these policies were themselves engaging in business communications via these unapproved methods. CIBC has admitted the facts detailed in the order and agreed to cease and desist from further violations. As part of the settlement, CIBC is also required to undertake specific remedial measures to improve its compliance program.
The CFTC noted CIBC’s cooperation during the investigation. This case is part of a larger crackdown by the CFTC on financial institutions failing to meet recordkeeping standards. Since December 2021, the agency has levied $1.237 billion in penalties against 27 firms for similar violations related to unapproved communication methods.
Adding to CIBC’s legal woes, the Securities and Exchange Commission (SEC) simultaneously announced charges and penalties against CIBC affiliates for related recordkeeping and supervision failures. The investigation was led by CFTC staff members Katie Rasor, Alejandra de Urioste, David MacGregor, Lenel Hickson, Jr. and Manal M. Sultan.
Source: CFTC.gov
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