CFTC Concludes Enforcement Sprint with $8.3 Million in Penalties Across 10 Financial Firms

The Commodity Futures Trading Commission (CFTC) announced the completion of an enforcement sprint initiative, issuing six separate orders that simultaneously filed and settled material compliance-related charges against 10 financial firms. In total, the actions resulted in $8,325,000 in civil monetary penalties. The enforcement sprint initiative, introduced by Acting Chairman Caroline D. Pham, was designed to resolve longstanding, compliance-focused investigations efficiently. The initiative focused strictly on operational and technical infractions—such as recordkeeping, trade surveillance, and reporting lapses—that did not involve fraud, market manipulation, or customer harm. Participating firms submitted remediation plans and settlement offers aligned with historical enforcement precedent and the Division of Enforcement's (DOE) Advisory on Self-Reporting, Cooperation, and Remediation. The largest financial penalty was assessed against UBS entities—including swap dealer UBS AG, UBS Financial Services Inc., and UBS Securities LLC. The firms agreed to pay a $5 million penalty and submit progress reports on remediation after the CFTC found failures to diligently supervise trade surveillance systems between 2015 and 2024. These system errors left surveillance gaps across foreign exchange, metals, rates, credit products, and exchange-traded derivatives. Citigroup Global Markets Inc. was ordered to pay a $1.5 million civil penalty for failing to file accurate large trader reports from 2015 to late 2022 due to a programming error, failing to maintain certain regulatory records for 10 weeks in 2023, and supervisory deficiencies concerning daily excess net capital reporting in 2022. The penalty was reduced to reflect maximum mitigation credit for exemplary self-reporting and cooperation. Three orders addressed unapproved offline communications, where employees used personal text messages and unauthorized messaging apps in violation of recordkeeping and supervision requirements. Each matter resulted in a $500,000 penalty after accounting for cooperation credits: - SMBC Capital Markets, Inc. settled charges spanning the period from 2019 to 2023. - Banco Santander, S.A. and Santander US Capital Markets LLC settled charges dating back to 2021, agreeing to an internal compliance audit of electronic communications programs for U.S.-based associated persons. - The Bank of New York Mellon and BNY Mellon Securities Corporation settled violations dating back to 2020 and agreed to implement recommendations from an independent compliance consultant. In the final action, swap dealer U.S. Bank, N.A. agreed to pay $325,000—also reduced for exemplary self-reporting and cooperation—to resolve charges that it reported inaccurate valuation data for foreign exchange products and interest rate swaps to a swap data repository between 2022 and 2024 due to methodology errors. All settling firms agreed to cease and desist from further violations of the Commodity Exchange Act and CFTC regulations. According to the regulator, concluding these technical compliance cases will allow the Division of Enforcement to redirect its resources toward tackling market manipulation, fraud, and protecting customer funds.