A German-based bank agreed to pay $12 million to settle CFTC charges for failing to sufficiently supervise swap dealer ("SD") activities.
According to the CFTC Order, Commerzbank AG ("Commerzbank") neglected to adequately address SD compliance issues after its management was informed of the CFTC's investigations of these activities. The CFTC claimed that Commerzbank filed inaccurate chief compliance officer reports with the CFTC.
The alleged violations included failures to:
- institute policies designed to determine if swap transactions with certain non-U.S. swap counterparties were subject to Dodd-Frank requirements;
- report swap transactions to swap data repositories;
- submit Large Trader Reports to the CFTC; and
- execute swaps on swap execution facilities.
In addition to paying $12 million, Commerzbank must also: (i) retain an outside consultant to review swap dealer compliance for two years and (ii) generate annual reports evaluating the swap dealer's compliance with the CEA and CFTC rules.
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