US Bank and Oppenheimer & Co will pay a total of $7 million to the Commodity Futures Trading Commission (CFTC) in a federal crackdown on out-of-channel communications and improper record keeping.
The CFTC jointly ordered both US Bank and Oppenheimer & Co, an introducing broker, to pay $6 million and $1 million, respectively, in civil monetary penalties for the same violation.
The CFTC says the companies have admitted that from 2019 to date, both companies have failed to prevent their employees from using unapproved communication channels such as personal text messages.
“The firms were required to retain certain written communications as they related to the firms’ CFTC-registered businesses.
These written communications generally were not maintained or retained by either firm, and neither firm would generally have been able to promptly provide them to the CFTC if and when requested.
Each order further finds that the company-wide use of unapproved communication methods violated each company’s internal policies and procedures, which generally prohibit company-related communications using unapproved methods. In addition, some of the supervisory personnel responsible for ensuring compliance with the company’s policies and procedures have also used unapproved communication methods to engage in company-related communications, which is contrary to the company’s policies company.”
US Bank reportedly has about $650 billion in assets under management, while Oppenheimer has $28 billion.
The CFTC says that since December 2021, the agency has assessed a total of $1.124 billion in civil monetary penalties against 22 different financial institutions for the same violation – the unapproved communications methods, in violation of CFTC recordkeeping and oversight requirements.
Last year, BNP Paribas’ U.S. registered broker-dealer division said it was being investigated by the U.S. Securities and Exchange Commission (SEC) and the CFTC for possibly violating provisions on record keeping and the use of private text messaging messages for communication.
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