CFTC Takes Enforcement Action against Firm for Failure to File Large Trader Reports

The CFTC entered an order and simultaneously settled charges against an Australia-based financial services company for failing to comply with the obligation to submit accurate large trader reports ("LTRs") for physical commodity swap positions. This failure violated Section 4s(f) of the CEA and CFTC Rules 20. 4 and 20.7.

The order states that the financial services company (i) did not identify any underlying commodity, (ii) routinely populated the field for "Commodity Reference Price" in a format other than the one provided by the CFTC's Guidebook for Part 20 Reports, (iii) reported certain non-zero positions as having a value of zero, (iv) reported its positions in units of the underlying commodity rather than in futures contract equivalents, and (v) submitted LTRs misidentifying counterparty positions as its own positions as the principal.

The order requires the financial services company to pay a $150,000 civil monetary penalty and to cease and desist from committing further violations of the CEA and CFTC Regulations. This settlement represents the CFTC's first enforcement action involving swaps Large Trader Reporting obligations imposed by the Dodd-Frank Act.