Washington, D.C. – Truist Bank, a North Carolina-based swap dealer, has been penalized $3 million by the Commodity Futures Trading Commission (CFTC) for failing to maintain adequate records and supervise employee communications, according to an order issued today.
The CFTC found that Truist did not properly preserve or produce records as required under CFTC regulations. The bank also failed to diligently supervise activities related to its business as a swap dealer. Truist admitted to the findings and agreed to cease and desist from further violations.
The investigation revealed that between December 2019 and the present, Truist prohibited employees from using unapproved communication methods – like personal text messages and social applications – for business-related communications. Despite these policies and regular employee attestations of compliance, widespread use of these unapproved methods occurred, including among senior-level employees. Communications sent through these channels were not monitored, reviewed, or archived.
Truist self-reported the issue after proactively reviewing employee communication practices and discovering the extent of the violations. This self-reporting, along with substantial cooperation during the CFTC’s investigation and remediation efforts, resulted in a reduced penalty. The CFTC noted Truist is the only registrant in over 20 similar cases to self-report the failures.
“Truist’s decision to self-report, cooperate, remediate, and be held accountable allowed it to benefit in the form of a substantially reduced penalty,” stated Ian McGinley, Director of Enforcement. The CFTC emphasized that compliance with recordkeeping and supervision requirements remains paramount, and failures to adhere to these obligations will be met with penalties.
Truist has agreed to enhance its compliance program as part of the settlement. The bank conducted an internal survey of senior employees after reviewing public CFTC orders against other registrants for similar offenses, identified potential violations, and promptly reported its findings to the agency.
Source: CFTC.gov
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