Washington, D.C. – Interdealer broker Tullett Prebon Americas Inc. will pay $13 million to settle charges brought by the U.S. Commodity Futures Trading Commission (CFTC) for failing to adequately supervise its employees and for providing false or misleading statements during a CFTC investigation. The settlement, announced today, includes two separate orders outlining the penalties.
The first order mandates an $11 million civil monetary penalty against Tullett for failing to supervise the conduct of voice brokers on its U.S. Dollar Medium Term Interest Rate Swaps Desk. The CFTC found that Tullett did not implement sufficient supervisory procedures to prevent brokers from making false or misleading statements to customers regarding trades, bids, and offers in U.S. dollar medium term interest rate swaps. Furthermore, the company allegedly failed to take adequate corrective action after being alerted to the problematic conduct.
A second order requires Tullett to pay a $2 million civil monetary penalty for making false or misleading statements to CFTC staff during the course of an investigation. According to the CFTC, at least one Tullett broker made materially false statements or omitted crucial facts when questioned by investigators. The agency considers these statements a violation of the Commodity Exchange Act and attributes the responsibility to Tullett, as the actions occurred within the scope of the broker’s employment.
“The CFTC is devoted to ensuring price transparency and competition in all markets,” stated CFTC Director of Enforcement James McDonald. “As important, the CFTC is committed to ensuring that its investigations and fact gathering processes are not obstructed by false or misleading information.”
Tullett Prebon Americas provides intermediary services to institutional customers trading interest rate derivatives, foreign exchange, and energy products. The CFTC’s investigation revealed systemic shortcomings in Tullett’s supervisory framework, allowing the alleged misconduct to persist. The settlement requires Tullett to comply with specific undertakings designed to improve its internal controls and prevent future violations. The CFTC’s Enforcement Division received assistance from the U.S. Securities and Exchange Commission’s Enforcement Division during the investigation.
Source: CFTC.gov
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