Washington, D.C. – The Commodity Futures Trading Commission (CFTC) today announced settlements with The Toronto Dominion Bank (TD Bank) and Cowen and Company, stemming from failures to comply with recordkeeping and supervision regulations. The CFTC alleges both firms allowed employees to utilize unapproved communication methods, like personal text messaging, for business-related discussions, failing to preserve records as required.
TD Bank will pay a $75 million civil monetary penalty, while Cowen will pay $3 million. Both firms admitted to the facts outlined in the CFTC’s orders and have been directed to cease and desist from further violations. They are also required to undertake specific remedial measures to improve compliance.
According to the CFTC, TD Bank’s failures spanned from at least 2015 to the present, and Cowen’s from at least 2019 until February 2024. These lapses involved communications pertaining to their CFTC-registered businesses, which were not properly maintained or preserved, hindering the firms’ ability to promptly provide them to the CFTC upon request.
The use of these unapproved methods reportedly violated internal firm policies, and in some instances, supervisory personnel responsible for enforcing those policies were themselves utilizing these methods for business communications. This represents a systemic failure of compliance oversight.
This action is part of a larger CFTC crackdown on similar violations. Since December 2021, the agency has levied $1.202 billion in penalties against 24 financial institutions for recordkeeping and supervision failures related to unapproved communication channels. The Securities and Exchange Commission (SEC) also announced parallel actions today against affiliates of both TD Bank and Cowen, further highlighting the severity of these violations.
The CFTC’s investigation was led by Penina Moisa, Andrew Rodgers, Devin Cain, Alejandra de Urioste, R. Stephen Painter, Jr., Lenel Hickson, Jr., and Manal M. Sultan of the Division of Enforcement.
Source: CFTC.gov
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