According to Reuters, the U.S. Commodity Futures Trading Commission (CFTC) announced yesterday that it has imposed a civil penalty worth $850,000 on JPMorgan Chase, a leading U.S. financial firm, for failing to comply with reporting obligations related to swap transactions.
In an official announcement issued by the authority on July 5, the CFTC noted that it had ordered JPMorgan Chase to cease and desist from further violations of the Commodity Exchange Act.
According to the CFTC's overview, JPMorgan Chase failed to report nearly 2.1 million short-term foreign exchange swap transactions between September 2015 and February 2020. During that period, unreported short-term foreign exchange swaps accounted for nearly 51 percent of the total foreign exchange swap transactions executed by JPMorgan Chase.
The CFTC explained, “A short-term foreign exchange swap is a reportable foreign exchange swap transaction because it involves the exchange of currencies and the reversal of that exchange on a specified date at an exchange rate that was fixed at the time the contract began. As such, JPMorgan Chase was obligated to report its short-term foreign exchange swaps under the relevant legal and regulatory requirements, but did not do so during the relevant period.”
Gretchen Lowe, acting director of enforcement for the CFTC, emphasized the importance of timely reporting of swaps. She noted that “timely and accurate reporting of swap transactions by registered swap dealers is critical to the CFTC's mission of protecting market participants and ensuring market transparency and integrity.”
Indeed, in the past few months, the CFTC has stepped up its efforts to combat illegal financial trading activity within its jurisdiction. in May 2022, authorities charged a U.S. resident involved in a $59 million illegal foreign exchange scheme. That same month, the CFTC uncovered a $44 million Ponzi cryptocurrency investment scheme.
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