CFTC Orders Swaps Trader to Pay $90,000 Penalty Over False Statements and Message Deletion

The Commodity Futures Trading Commission (CFTC) announced that the U.S. District Court for the Southern District of New York has entered a consent order against John Patrick Gorman III, resolving enforcement charges related to false statements and record deletion during an agency investigation. Gorman, a U.S. dollar swaps trader and managing director of a global investment bank, was ordered to pay a $90,000 civil monetary penalty. According to the order, CFTC Division of Enforcement staff issued a preservation request in March 2019 for records related to trading activities conducted by Gorman and his employer. After becoming aware of the request, Gorman deleted covered communications, including WhatsApp messages and a message from a text conversation with a colleague that was material to the investigation. When his personal phone was imaged pursuant to an investigative subpoena, numerous responsive messages were absent. The findings further indicate that Gorman submitted a letter to the CFTC in May 2019 falsely claiming he had not destroyed or altered any preserved documents. He subsequently made additional false and misleading statements during formal testimony in November 2019 regarding his compliance with the preservation request and communications with colleagues outside the swaps desk. The regulator determined that Gorman knew or reasonably should have known these statements were inaccurate and material to the inquiry. CFTC Director of Enforcement David I. Miller stated that attempts to impede or obstruct investigations directly undermine the Commission's ability to enforce the law, emphasizing that the regulator maintains zero tolerance for false statements made to staff. The consent order permanently enjoins Gorman from violating the charged provisions of the Commodity Exchange Act and dismisses with prejudice counts I and II of the CFTC complaint originally filed against him on February 1, 2021.