CFTC Unveils 2015 Enforcement Report, $4.6B in Fines against FX Abuse

The U.S. Commodity Futures Trading Commission (CFTC) released its enforcement results for 2015 fiscal year, which included an aggregate total record of $3.14 billion in civil monetary penalties, according to a CFTC statement.

While the US regulatory scene has been seen as a brute force measure in the United States, namely its implementation of Dodd-Frank, few can argue the myriad benefits afforded to market participants and traders by the CFTC’s enforcement agency.

During the 2015 fiscal year, a total of 69 enforcement actions have been levied against such charges as manipulation, spoofing, and fraud, whilst ensuring market participants meet their requisite regulatory requirements.

In 2015, the CFTC undertook several integral actions, enforcing the new authorities granted by the US Congress in the Dodd-Frank Act. This was highlighted by the CFTC’s flagship case that ultimately oversaw the fines associated with the benchmark rate manipulation, imposing the largest monetary penalty in CFTC history ($800 million) against Deutsche Bank for manipulation of LIBOR. Additionally, the regulator settled charges of manipulation of Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term exchange benchmark rates.

With specific regard to forex, during 2015 the CFTC has imposed a total of $4.6 billion in penalties in 15 actions against banks and brokers to address foreign exchange (FX), Libor, and ISDAFIX benchmark abuses and ensure the integrity of global financial benchmarks.

According to CFTC Chairman Timothy Massad in a recent statement on the annualized results, “Integrity of the markets is at the core of our mission, and I am dedicated to ensuring that the agency has an aggressive enforcement program to protect customers and prevent fraud and manipulation. I thank the hardworking staff of the CFTC’s Enforcement Division for their work in protecting the integrity of the futures and Swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term market.”

“I could not be more proud of the accomplishments of the hardworking and talented staff of Division of Enforcement. Their unswerving dedication to the Division’s mission of protecting customers and ensuring market integrity brought truly exceptional results in FY 2015," added Aitan Goelman, the CFTC’s Division of Enforcement's Director, in an accompanying statement.

“Despite our limited resources, the men and women of the Division were able to achieve extraordinary things, including record fines and the groundbreaking utilization of many of the new authorities that Congress bestowed upon the agency in the Dodd-Frank Act. Their work makes the futures and swaps markets fairer and customers safer,” he added.