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June 19, 2020

Deutsche Bank fined over $10m for reporting violations and spoofing

Deutsche Bank has agreed to a $10m settlement with the US Commodity Futures Trading Commission (CFTC) to resolve two cases of swap data reporting breaches and spoofing.

One case involves a civil monetary penalty of $9m on the bank for swap data reporting and other regulatory violations.

The violations were the result of a swap reporting platform outage at the bank, starting on 16 April 2016.

The bank failed to report swap data for multiple asset classes for the next five days.

CFTC alleged that the bank’s initiatives to end the outage increased existing reporting problems and created new reporting problems.

However, the fine was discounted substantially owing to the bank’s consent to a court-appointed monitor, CFTC said.

The bank deployed other remediation efforts to resolve the allegation, including increased supervision as well as a disaster recovery plan.

In the second case, Deutsche Bank Securities was fined a civil monetary penalty of $1.25m for spoofing in the Treasury futures and Eurodollar futures contracts on the CME.

The misconduct is said to have occurred due to the misconduct of two unnamed Tokyo-based traders from January 2013 through at least December 2013.

CFTC director of enforcement James McDonald said: “This case reaffirms the importance of proper reporting among registered swap dealers.

“The Commission has been charged with monitoring and addressing systemic risks in our swaps markets. We can’t fulfill these obligations if we don’t have accurate reporting of the swaps dealing activity of our registrants.”

Deutsche Bank has been going through a massive overhaul after facing legal issues and failed turnaround initiatives.

The overhaul includes 18,000 redundancies.

Last year, the bank was fined $16.2m for corrupt hiring practices.

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