U.S. Bank and Oppenheimer Hit with $7 Million Fine for Off-Channel Communications
The Commodity Futures Trading Commission (CFTC) has levied a $7 million penalty against U.S. Bank and Oppenheimer & Co for their involvement in unauthorized off-channel communications. Here’s what you need to know:
Joint Settlement and Monetary Penalties
- U.S. Bank and Oppenheimer & Co have been jointly ordered to pay $6 million and $1 million in civil monetary penalties, respectively.
Violation of Communication Policies
- Both firms admitted to failing to prevent their employees from using unapproved communication channels like personal text messages.
- Written communications pertaining to the firms’ CFTC-registered businesses were not adequately maintained and available for prompt retrieval.
Internal Policy Breach
- The use of unapproved communication methods violated the internal policies of both firms, which prohibited business-related communication through unauthorized channels.
Previous Penalties and Financial Scope
- Since December 2021, the CFTC has imposed $1.124 billion in civil monetary penalties on 22 financial institutions for similar violations.
- U.S. Bank manages $650 billion in assets, while Oppenheimer oversees $28 billion.
Industry Compliance and Investigations
- Last year, the US-registered broker-dealer arm of BNP Paribas faced investigations from the SEC and CFTC for possible breaches of record-keeping provisions and using private text messages for communication.
Hot Take: Takeaways for Crypto Investors
If you are involved in the crypto space, it’s essential to stay informed about the regulatory environment and compliance requirements to avoid pitfalls similar to those faced by U.S. Bank and Oppenheimer. Understanding the importance of proper record-keeping and communication practices can help you navigate the evolving regulatory landscape successfully.
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