BGC Financial Hit with $3 Million Fine for Supervision Lapses
- The settlement comes barely a month after two units of BGC paid $25 million to settle charges related to FX options.
The US Commodity Futures Trading Commission (CFTC) has fined the voice brokerage arm of BGC Partners Inc $3 million to settle charges of supervision, reporting, and recordkeeping violations spanning over five years.
BGC Financial LP was ordered to pay a civil money penalty and cease and desist from committing further violations of CFTC regulations. Additionally, the order requires the interdealer broking group to retain an outside consultant to review its compliance and recommend improvements. During this time, the consultant will create reports on findings and remediation efforts that BGC will be required to submit to the CFTC.
Per regulators, from 2014 and 2019, BGC failed to establish a supervisory system with respect to its traditional and block trading futures brokerage businesses. Among other things, BGC lacked adequate processes in areas such as the creation, maintenance, and retention of audit trail data.
BGC’s employees also violated its policies that prohibit the use of their personal phones to conduct firm business. In two instances, BGC managers were unaware of assuming a supervisory role on several brokers at their branches, which led to other violations of the company’s recordkeeping, reporting, and other Obligations Obligations In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you .
BGC Financial and GFI pay $25 million civil fine
“Today’s enforcement action highlights the importance of recordkeeping, supervision, and transparency in reporting to the Commission. These are fundamental requirements, which are necessary for the Commission to accomplish its mission to safeguard the integrity of our markets,” said CFTC Director of Enforcement James McDonald.
The penalty is the latest to be handed out in a long-running regulatory probe into BGC’s practices. The settlement comes barely a few weeks after two units of BGC Partners paid $25 million to settle charges of fraudulent practices related to FX option trades.
Brokers at BGC Financial and GFI Securities created false trades to induce customers to indulge in foreign-Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv options at unfair prices, according to charges brought by the CFTC, the main US derivatives market regulator.
The US Commodity Futures Trading Commission (CFTC) has fined the voice brokerage arm of BGC Partners Inc $3 million to settle charges of supervision, reporting, and recordkeeping violations spanning over five years.
BGC Financial LP was ordered to pay a civil money penalty and cease and desist from committing further violations of CFTC regulations. Additionally, the order requires the interdealer broking group to retain an outside consultant to review its compliance and recommend improvements. During this time, the consultant will create reports on findings and remediation efforts that BGC will be required to submit to the CFTC.
Per regulators, from 2014 and 2019, BGC failed to establish a supervisory system with respect to its traditional and block trading futures brokerage businesses. Among other things, BGC lacked adequate processes in areas such as the creation, maintenance, and retention of audit trail data.
BGC’s employees also violated its policies that prohibit the use of their personal phones to conduct firm business. In two instances, BGC managers were unaware of assuming a supervisory role on several brokers at their branches, which led to other violations of the company’s recordkeeping, reporting, and other Obligations Obligations In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you .
BGC Financial and GFI pay $25 million civil fine
“Today’s enforcement action highlights the importance of recordkeeping, supervision, and transparency in reporting to the Commission. These are fundamental requirements, which are necessary for the Commission to accomplish its mission to safeguard the integrity of our markets,” said CFTC Director of Enforcement James McDonald.
The penalty is the latest to be handed out in a long-running regulatory probe into BGC’s practices. The settlement comes barely a few weeks after two units of BGC Partners paid $25 million to settle charges of fraudulent practices related to FX option trades.
Brokers at BGC Financial and GFI Securities created false trades to induce customers to indulge in foreign-Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv options at unfair prices, according to charges brought by the CFTC, the main US derivatives market regulator.