Clifford Chance

Record-setting CFTC and DOJ penalties imposed after failure to provide complete and accurate information in an earlier investigation and settlement of spoofing charges

August 25, 2020

On August 19, 2020, the U.S. Commodity Futures Trading Commission announced a $127.4 million settlement with a bank headquartered outside the United States for spoofing and false statements. The settlement resulted from the Bank's failure to respond candidly in connection with a prior spoofing investigation by CFTC, which was settled settled in 2018 for $800,000, and the discovery of additionally violations upon CFTC's expanded reinvestigation. CFTC Chairman Heath Tarbert commented that “[t]hese record-setting penalties reflect not only our commitment to being tough on those who break the rules, but also the tremendous strides the agency has made in data analytics.”  The current settlement includes the largest penalties ever assessed by CFTC for spoofing and for making false statements to CFTC as well as the appointment of a monitor. In addition, the Bank entered a deferred prosecution agreement with the U.S. Department of Justice and agreed to pay a criminal fine of $60.4 million. The size and scope of these penalties underscore the downsides of failure to respond thoroughly and candidly to CFTC investigations. More information on these topics can be found in Clifford Chance’s Guide to United States and United Kingdom Derivative and Commodity Market Enforcement Regimes and other publications, including Responding Properly to US/UK investigations, and CFTC Updates Self-Reporting and Cooperation Guidelines.

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