CFTC Orders E*TRADE Securities, Clearing to Pay $280K for Supervisory Failures

The US Commodity Futures Trading Commission (CFTC) has issued an order simultaneously filing and settling charges against brokerage group E*TRADE Securities LLC, and subsidiary E*TRADE Clearing Clearing Clearing is a general term that simply means many different things depending on the subject and related industry. Most commonly, this refers to the reciprocal exchange between banks of checks and drafts, and the settlement of the differences, or the total of claims settled at a clearinghouse. In finance and banking, the word clearing has different meanings depending on the more specific business model. Moving checks from the bank where they were deposited to the bank on which they were drawn. Th Clearing is a general term that simply means many different things depending on the subject and related industry. Most commonly, this refers to the reciprocal exchange between banks of checks and drafts, and the settlement of the differences, or the total of claims settled at a clearinghouse. In finance and banking, the word clearing has different meanings depending on the more specific business model. Moving checks from the bank where they were deposited to the bank on which they were drawn. Th Read this Term LLC, a Futures Commission Merchant (FCM), for their non-compliance with applicable record-keeping rules, according to a regulatory filing.

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The nature of the order stems from a combination of supervisory shortcomings and non-compliance with existing record-keeping rules for FCMs. Both entities agreed to a settlement of a $280,000 Civil Monetary Penalty for the aforementioned violations.

The CFTC Order found that between October 2009 and January 25, 2014, E*TRADE Securities did not properly preserve and maintain requisite audit trail logs for their client base. E*TRADE Clearing also did not maintain customer audit trail logs after becoming registered as an FCM in February 2013.

In particular, the order found that by not maintaining these records, E*TRADE Securities and E*TRADE Clearing violated specific sections of the Commodity Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Act (CEA) as well as CFTC Regulations (1.31 and 1.35). Consequently, the CFTC Order required both E*TRADE Securities and E*TRADE Clearing to jointly to pay a $280,000 civil monetary penalty and to cease and desist from further violations of the CEA.