Deutsche Bank and CFTC continue to work on settlement over swap data reporting violations

Maria Nikolova

The regulator and Deutsche Bank have reached a settlement in principle in a case launched back in 2016.

Deutsche Bank AG and the United States Commodity Futures Trading Commission (CFTC) are still working on a settlement of a case brought against the bank back in 2016. This becomes clear from a status report published earlier today.

The document, filed with the New York Southern District Court and seen by FinanceFeeds, says that Deutsche Bank and the staff of the CFTC have reached a settlement agreement in principle, which is subject to the approval of the Commission. The parties continue to work toward finalizing the settlement.

A further status update is set to be provided to the Court by July 24, 2020.

Let’s recall that, back in August 2016, the CFTC filed a Complaint charging Deutsche Bank AG with failing to report any swap data for multiple asset classes for five days; submitting incomplete and untimely swap data; failing to supervise its employees responsible for swap data reporting; having an inadequate Business Continuity and Disaster Recovery Plan; and violating a prior CFTC Order.

As alleged in the CFTC’s Complaint, on April 16, 2016, Deutsche Bank’s swap data reporting system experienced a Systems Outage that prevented Deutsche Bank from reporting any swap data for multiple asset classes for approximately five days. Deutsche Bank’s subsequent efforts to end the System Outage repeatedly exacerbated existing reporting problems and often led to the discovery or creation of new reporting problems, many of which violate a CFTC Order entered in September 2015.

For instance, the Complaint alleges that Deutsche Bank’s swap data reported before and after the System Outage revealed persistent problems with the integrity of certain data fields, including numerous invalid legal entity identifiers (LEIs). The Complaint also alleges that the System Outage and the subsequent reporting problems transpired at least in part because Deutsche Bank failed to have an adequate Business Continuity and Disaster Recovery Plan and other appropriate supervisory systems in place.

The CFTC seeks, inter alia, the imposition of a civil monetary penalty and a permanent injunction.

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