Six Major Banks to Pay $6 Million in CFTC Settlement Over Swap Activities
October 01 2019 - 10:10PM
Dow Jones News
By Kimberly Chin
Six major financial institutions have agreed to pay a collective
$6 million to settle allegations of lax oversight and reporting
failures regarding swap activities, the U.S. Commodity Futures
Trading Commission has said.
The six banks were HSBC Holdings PLC's (HSBC) HSBC Bank USA,
Societe Generale SA's (SCGLY) Societe Generale International Ltd.,
Northern Trust Corp. (NTRS), NatWest Markets PLC, Bank of New York
Mellon Corp. (BK), and PNC Financial Services Group Inc.'s (PNC)
PNC Bank, National Association.
Societe Generale International and Northern Trust were accused
of failing to provide adequate supervision of swap activity, and
paid the largest fines of the group, the CFTC said Tuesday.
Societe Generale International agreed to pay a $2.5 million
penalty for failing to properly report swap data and not ensuring
there were proper policies, procedures and supervision in place to
monitor such failures.
Separately, Northern Trust agreed to pay a $1 million fine for
several CFTC and Commodity Exchange Act violations, as well as for
failing to properly report hundreds of thousands of swap
transactions.
"We are pleased that the CFTC recognized our substantial
cooperation in this matter, as well as the remediation steps we
have already taken," a Northern Trust spokesman said.
The CFTC accused HSBC Bank of violating swap-dealer risk
management regulations, marking the first time such an action has
been brought by the agency, it said. HSBC Bank agreed to pay
$650,000 and other sanctions to settle accusations that it didn't
establish appropriate risk-management systems for its swap
activities and for failing to properly report swap activities.
The other banks agreed to pay separate fines ranging from
$300,000 to $850,000.
"Accurate reporting is essential to effective fulfillment of the
regulatory functions of the CFTC, including meaningful surveillance
and enforcement programs," CFTC's Director of Enforcement James
McDonald said in prepared remarks.
Through a spokeswoman NatWest said it acknowledges the CFTC's
findings and "has now put this right, having co-operated on this
matter with the CFTC and taken substantial action to address the
issue."
Representatives at HSBC, Societe Generale, BNY Mellon and PNC
didn't immediately respond to requests for comment.
All of the banks agreed to the settlements without admitting or
denying the CFTC's findings, the agency said.
Write to Kimberly Chin at kimberly.chin@wsj.com
(END) Dow Jones Newswires
October 01, 2019 21:55 ET (01:55 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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