A futures commission merchant ("FCM") agreed to settle charges of reporting failures in connection with filing inadequate futures and options transaction data reports with the CFTC. Pursuant to CEA Section 4g(a) and CFTC Rule 17.00, FCMs are required to report certain futures and options transaction data through so-called "large trader reports."
In an Order, the CFTC alleged that Morgan Stanley, a registered FCM, relied on proprietary in-house software to generate these reports. The CFTC determined that deficiencies in Morgan Stanley's software led to the omission of required data for reports filed between 2007 and 2017. The omissions occurred as a result of problems with the software, which resulted in errors in the aggregation and reporting of the required data.
To settle the charges, Morgan Stanley, which, in some instances, discovered and self-reported the errors to the CFTC, agreed to pay a $350,000 civil monetary penalty. In assessing the penalty, the CFTC noted Morgan Stanley's substantial cooperation, including its self-reporting and remedial efforts.
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