U.S. Bank and Oppenheimer & Co will pay a total of $7 million to the Commodity Futures Trading Commission (CFTC) in a federal crackdown on off-channel communications and improper record keeping.
The CFTC has jointly ordered both U.S. Bank and Oppenheimer & Co, an introducing broker, to pay $6 million and $1 million in civil monetary penalties respectively for the same offense.
The CFTC the firms have admitted that from at least 2019 until now, both of the firms failed to prevent their employees from using unapproved communication channels such as personal text messages.
“The firms were required to keep certain of these written communications because they related to the firm’s CFTC-registered businesses.
These written communications generally were not maintained and preserved by either firm, and neither firm generally would have been able to provide them promptly to the CFTC if and when requested.
Each order further finds the firm-wide use of unapproved communication methods violated each firm’s internal policies and procedures, which generally prohibited business-related communication via unapproved methods. Further, some of the supervisory personnel responsible for ensuring compliance with the firm’s policies and procedures also used unapproved communication methods to engage in business-related communications, in violation of firm policy.”
U.S. Bank reportedly has about $650 billion in assets under management while Oppenheimer has $28 billion.
The CFTC says that since December 2021, the agency has imposed a total of $1.124 billion in civil monetary penalties on 22 different financial institutions for the same violation – the unapproved communication methods, in violation of CFTC recordkeeping and supervision requirements.
Last year, the US-registered broker-dealer arm of BNP Paribas it was being investigated by the U.S. Securities and Exchange Commission (SEC) and the CFTC for possibly breaking record-keeping provisions and for using private text messages for communcation.
