The Commodity Futures Trading Commission (CFTC) is increasingly taking action on inaccurate reporting by market participants. In the past year, the CFTC has entered into three settlements with market participants for filing inaccurate reports.
Recently, the CFTC settled with ICE Futures U.S., Inc. for $3 million for inaccurately filing clearing member reports and record data on transactions. In the Matter of: ICE Futures U.S., Inc., CFTC Docket No. 15-17, Issued March 16, 2015. (ICE Settlement). In approving the settlement, CFTC Enforcement Director Aitan Goelman said, “The CFTC cannot carry out its vital mission of protecting market participants and ensuring market integrity without correct and complete reporting by registrants, including DCMs (Designated Contract Markets). Today’s action makes clear that registrants who fail to meet their reporting obligations will be held accountable …” CFTC Orders ICE Futures U.S., Inc. To Pay at $3 Million Civil Monetary Penalty for Recurring Data Reporting Violations, March 16, 2015 at p. 1 (press release).
The CFTC is particularly concerned with continuing to file inaccurate reports after the CFTC has brought the inaccuracy to the market participant’s attention. In the ICE Futures case, “[m]any of the inaccurate and incomplete reports made by ICE Futures U.S. occurred after Commission staff informed ICE Futures U.S. of the reporting problems and requested that the problems be corrected.” ICE Settlement at 2. While noting that ICE Futures U.S. ultimately “did fully cooperate fully with the Department of Enforcement’s Investigation” and “took corrective action to address these reporting deficiencies,” initially ICE Futures U.S. “did not respond in a timely and satisfactory manner to inquiries from Commission [CFTC] staff.” Id. at 5. Director Goelman would conclude, “the CFTC takes a particularly dim view of reporting violations that continue over many months, especially after CFTC staff has repeatedly alerted the registrant in question to the problems in its reporting.” Press release at 1.