The US Commodity Futures Trading Commission (CFTC) announced on Monday that it had filed and settled charges against Citibank and Citigroup Global Markets Limited for failing to comply with certain swap dealer requirements. According to the press release, both registered swap dealers did not allegedly report the Legal Entity Identifier (LEI) data to a swap repository known as SDR, among other supervision failures.
In September 2017, the authority found that Citi, both entities that were charged, had failed to report LEI data for swap transactions correctly to an SDR, to establish the electronic systems and procedures necessary to do so, to correct errors in LEI data previously reported to an SDR and failed to perform its supervisory duties diligently concerning LEI swap data reporting. As a result, the CFTC ordered Citi to pay a $550,000 civil monetary penalty in the first instance and issued a cease and desist order against them.
However, with the order issued today, the US authorities found that Citi still failed to report LEIs for swap transactions and meet its supervisory duties. “Specifically, today’s order finds that between 2013 to November 2019, Citi misreported LEIs for certain Swaps that it reported through a third-party reporting service provider by reporting the counterparty identifier as ‘Name Withheld,’ rather than reporting a valid LEI or a Privacy Law Identifier compliant with available CFTC no-action relief,” the US CFTC noted.
Citi to Pay a $1 Million Penalty
That said, today’s order imposed a $1 million civil monetary penalty on Citi. Also, another cease and desist order was issued against both swap dealers. “As this case demonstrates, the CFTC will vigorously pursue swap dealer registrants that fail to meet their reporting obligations and violate CFTC orders. Accurate swap data reporting is essential to fulfillment of the CFTC’s regulatory mandates, including monitoring systemic risk and preventing market abuse,” CFTC Acting Director of Enforcement Vincent McGonagle commented.
Recently, the US CFTC filed an enforcement action to charge a Texas resident and several Costa Rican companies with charges related to Forex and commodities fraud.
