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The Commodity Futures Trading Commission (CFTC) reached a 5 million-dollar settlement with Bank of New York Mellon (BNY) over claims that the bank habitually failed to accurately report its millions of swap transactions and did not adequately supervise its swaps desk trading. The CFTC disclosed this agreement on Monday, referring to ongoing reporting violations from 2018 through 2023.

According to the CFTC’s order, BNY breached a previous 2019 settlement agreement with the regulator. These failures on the bank’s part included incorrect valuation data from thousands of foreign exchange swaps and interest rate swaps, as well as the like. Among other things, bank failed to fill in necessary fields like buyer and seller identifiers and payment frequency for all exotic interest rate trades.

The CFTC also pointed out that BNY had no written procedures for overseeing communications in any language other than English, which contributed to failure of oversight. This failure involved not only a wide shop-floor area but also recurrent breaches of importance.

In spite of these failures, the CFTC recognized BNY's cooperation and its self-reporting of many violations, leading to a reduced fine. According to its 2023-2020 Annual Report, the bank that year found and reported several issues plus a few more violations being carried out in previous annual reports.

Holding to the principles of precision in reporting, CFTC Enforcement Director Ian McGinley emphasized that accurate processes for doing so are the "pillar" of swaps regulatory obligations. He praised BNY for its cooperation and decision to retain an independent compliance consultant to strengthen its compliance program.

This settlement comes with a general trend in CFTC enforcement actions of larger financial institutions. In 2023 the CFTC fined Goldman Sachs, JPMorgan, Bank of America and Merrill Lynch a total of $53 million for similar violations.

BNY said it took its regulatory obligations seriously and was satisfied with the outcome.