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Former Portfolio Manager Settles CFTC Charges for Fraudulently Mismarking Swap Valuations

A former portfolio manager settled CFTC charges for fraudulently mismarking swap valuations to increase his bonus.

According to the CFTC Order, Swapnil Rege mismarked the interest rate swaps on the books of a commodity pool operator ("CPO") by changing, among other things, the default discount curves in the software for pricing swaps. Mr. Rege's actions caused an increase in the CPO's reported performance, which led to overstated management fees. The CFTC alleged that Mr. Rege attempted to hide his misconduct by (i) falsifying documents and (ii) convincing the CPO's management and outside auditors that his records were accurate.

Mr. Rege agreed to pay a $100,000 civil monetary penalty and to disgorge $600,000.

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