Global Banks Hit with $8.3m in CTFC Compliance Penalties

Six major banks have agreed to pay more than $8.3 million in penalties to the Commodity Futures Trading Commission (CFTC) to resolve compliance violations.

Citi, BNY Mellon, U.S. Bank, UBS, Santander, and SMBC were all sanctioned for a range of shortcomings, from recordkeeping lapses to inaccurate reporting.

The penalties form part of the CFTC’s “enforcement sprint,” a program launched in March by Acting Chair Caroline Pham to help banks quickly settle lower-level compliance cases that don’t involve market abuse or harm to customers.

UBS faces the largest fine, at $5 million, for failing to adequately oversee trade surveillance systems over nearly a decade. The regulator said the Swiss bank’s systems left gaps in monitoring across a wide range of asset classes, including foreign exchange, metals, rates, credit products, and exchange-traded derivatives.

Citi was fined $1.5 million, though the amount was reduced due to what the CFTC described as “exemplary self-reporting and cooperation.” The bank’s issues included submitting inaccurate large-trader reports between 2015 and 2022 because of a programming error, and a separate failure to maintain required records for several weeks in 2023.

U.S. Bank will pay $325,000 to settle claims that it provided incorrect swap valuation data for some foreign-exchange and interest-rate products due to flaws in its methodology.

BNY Mellon, meanwhile, was penalized again for off-channel communications failings just months after paying $40 million to the SEC in a related case. As part of its settlement with the CFTC, the bank has been ordered to adopt the recommendations of an independent compliance consultant.

Santander must also carry out an internal audit of its electronic communications program for US staff and address any weaknesses uncovered.

The regulator emphasized that its enforcement sprint is designed to encourage firms to come forward with workable settlement proposals, signaling a more pragmatic approach to resolving compliance-related cases.