Washington D.C. – U.S. Bank, N.A. and Oppenheimer & Co., Inc. have agreed to settlements with the Commodity Futures Trading Commission (CFTC) for failing to adequately maintain records and supervise employee communications, as revealed in orders filed today.
The CFTC alleges that, beginning in at least 2019 and continuing to the present, both firms permitted employees – including those in senior positions – to use unapproved communication methods, such as personal text messaging, for business related to their CFTC-registered activities. These communications were not properly preserved, hindering the firms’ ability to promptly provide them to the CFTC when requested.
According to the orders, the use of these unapproved methods violated internal firm policies prohibiting such communication. Supervisory personnel were also found to have engaged in business discussions via these channels, further breaching company policy.
U.S. Bank will pay a $6 million civil monetary penalty as part of the settlement, while Oppenheimer will pay $1 million. Both firms are ordered to cease and desist from further violations of recordkeeping and supervision requirements and to implement specified remedial measures.
This action is part of a broader CFTC crackdown on the use of unapproved communication methods by financial institutions. To date, the CFTC has levied $1.124 billion in penalties against 22 firms for similar violations since December 2021.
The SEC has also taken action, recently announcing settlements with a U.S. Bank affiliate and Oppenheimer for parallel recordkeeping and supervision violations.
The CFTC staff leading the investigation included Devin Cain, Alejandra de Urioste, R. Stephen Painter, Jr., Lenel Hickson, Jr., and Manal M. Sultan.
Source: CFTC.gov
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