Wells Fargo Bank, N.A. has agreed to pay a $400,000 penalty to settle charges brought by the U.S. Commodity Futures Trading Commission (CFTC) for failing to accurately report large trader information, the agency announced Tuesday.
The CFTC alleges that Wells Fargo violated Section 4s(f)(1)(A) of the Commodity Exchange Act and related CFTC regulations by submitting inaccurate Large Trader Reports (LTRs) for physical commodity swap positions. The bank, headquartered in Sioux Falls, South Dakota, has been registered as a Swap Dealer with the CFTC since December 31, 2012.
According to the CFTC’s order, accurate LTR reporting is crucial for effective market surveillance of U.S. physical commodity futures and swaps. The agency found that from March 1, 2013, through November 13, 2015, *every* LTR submitted by Wells Fargo contained errors. These errors included missing data and data presented in a format that didn’t comply with CFTC requirements.
Specifically, the reports contained incorrect Clearing Member Identifiers and improperly formatted swaption expiration dates, among other issues. The CFTC stated that Wells Fargo began addressing the errors after receiving an initial error message in July 2015, and continues to modify its data processing and reporting systems to ensure compliance.
As part of the settlement, Wells Fargo is required to cease and desist from further violations of the Commodity Exchange Act and CFTC regulations. The CFTC staff included Neel Chopra, Joseph Muoio, Michael Cazakoff, Candice Aloisi, Lenel Hickson Jr., and Manal Sultan in the investigation.
The CFTC also acknowledged the assistance of Richard Galloway, Regina Sanders, and Edward Wehner from its Office of Data Technology in the matter.
Source: CFTC.gov
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