Washington, D.C. – The Commodity Futures Trading Commission (CFTC) levied a $750,000 penalty against The Bank of New York Mellon (BNYM) for failing to accurately report hundreds of thousands of swap transactions, according to an order filed Monday, September 30, 2019.
BNYM, the world’s largest custody bank and asset servicing company, violated the Commodity Exchange Act (CEA) and related CFTC regulations regarding swap reporting requirements. The failures spanned from December 31, 2012, through at least 2018.
The CFTC’s investigation revealed that BNYM incorrectly reported tens of thousands of foreign exchange (FX) swaps between December 31, 2012, and July 2, 2018. Further violations included failing to report tens of thousands of swap transactions involving BNYM affiliates. The bank also failed to correctly report “bunched trades”—transactions executed by investment managers on behalf of multiple principals—from December 31, 2012, through December 31, 2018.
The CFTC acknowledged BNYM’s “substantial cooperation” with the Division of Enforcement’s investigation and its subsequent remediation efforts, leading to a reduced civil monetary penalty. The order details that without this cooperation, the penalty could have been significantly higher.
Jason T. Wright, Patricia Gomersall, A. Daniel Ullman II, and Paul G. Hayeck of the Division of Enforcement staff led the investigation.
Source: CFTC.gov
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