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CFTC Annual Enforcement Results

CFTC Annual Enforcement Results

By: Chris Waitz, Director of Regulatory Affairs, Eventus

 

The CFTC recently released its annual report on enforcement results. The report summarizes the enforcement action taken over the previous year and provides insight into the areas of focus for the agency. This year’s report demonstrates the CFTC’s continued commitment to protecting customers and ensuring market integrity through the agency’s enforcement related to fraud, manipulation, reporting, supervision and misconduct related to digital assets.

The CFTC obtained orders imposing over $2.5 billion in restitution, disgorgement and civil monetary penalties across 82 enforcement actions. The enforcement actions include:

  • Eighteen enforcement actions were related to digital assets including failures to register as a Swap Execution Facility (SEF), Designated Contract Market (DCM) or Futures Commission Merchant (FCM) and fraud
  • In the CFTC’s largest manipulation case to date, the agency found that an energy firm engaged in manipulation and foreign corruption and was ordered to pay $1.186 billion in penalties and disgorgement
  • The agency continues to vigorously prosecute spoofing including cross market and single marking spoofing in soybeans, gasoline and treasury futures
  • FCM and Swap Dealer affiliates of twelve financial institutions committed record keeping and supervision failures related to the use of unapproved communication methods
  • Violations by registered entities for failures related to controls testing, systems resilience, and customer notices
  • Misappropriation of material non-public information
  • Swap reporting and Swap Dealer business conduct
  • Fraud, registration, reporting, wash trading, and position limit violations

ViP: Eventus’ Validus platform is designed to handle the complex requirements of derivatives market surveillance. Our surveillance platform is used by FCMs, SEFs and DCMs to help meet the CFTC and NFA’s market surveillance, trade practice and supervision requirements. Validus offers a comprehensive suite of over 200 procedures that monitor activities including spoofing, layering, wash trades, losses, reference price manipulation, off-market trades and market dominance.

With the ability to run Validus in real time or T+1, alerts are generated in a timely manner. Validus’ built-in investigative tools, including visualization of orders, trades and market data, enable a compliance analyst to quickly determine if an alert can be closed or may require escalation.

Validus users can also access an immutable audit log, which provides a record of how each alert is configured, any changes made to the alert parameters and the alert review. All of these elements can be exported in a report format in the event they need to be shared externally.

The detection and remediation of potential violations remains a cornerstone of an effective compliance program. With state-of-the-art platforms available to deliver cost-effective monitoring capabilities, the onus is on senior managers to ensure compliance and avoid finding their firm on the wrong side of the CFTC’s ongoing commitment to vigorous enforcement.

 

About Eventus 

Eventus is a leading global provider of multi-asset class trade surveillance and market risk solutions. Its powerful, award-winning Validus platform is easy to deploy, customize and operate across equities, options, futures, foreign exchange (FX), fixed income and digital asset markets. Validus is proven in the most complex, high-volume and real-time environments of tier-1 banks, broker-dealers, futures commission merchants (FCMs), proprietary trading groups, market centers, buy-side institutions, energy and commodity trading firms, and regulators. The company’s rapidly growing client base relies on Validus and Eventus’ responsive support and product development teams to overcome its most pressing regulatory challenges. For more, visit  www.eventus.com.