The order also charges Citi for violating the cease and desist provision of a 2017 CFTC order relating to reporting and supervisory failures. [See CFTC Press Release No. 7616-17]

The order imposes a $1 million civil monetary penalty on Citi, which reflects a reduction in recognition of Citi’s substantial cooperation with the Division of Enforcement’s investigation and proactive remediation. Today’s order also requires Citi to cease and desist from further violations of the Commodity Exchange Act and CFTC regulations, as charged, and mandates its compliance with certain undertakings to provide its SDR corrected swap data and to update the CFTC on its remediation efforts.

“As this case demonstrates, the CFTC will vigorously pursue swap dealer registrants that fail to meet their reporting obligations and violate CFTC orders,” said Acting Director of Enforcement Vincent McGonagle. “Accurate swap data reporting is essential to fulfillment of the CFTC’s regulatory mandates, including monitoring systemic risk and preventing market abuse.”

Case Background

In September 2017, the CFTC entered an order that found Citi failed to report LEI data for swap transactions correctly to an SDR; failed to establish the electronic systems and procedures necessary to do so; failed to correct errors in LEI data previously reported to an SDR; and failed to perform its supervisory duties diligently with respect to LEI swap data reporting. The CFTC ordered Citi to pay a $550,000 civil monetary penalty and required Citi to cease and desist violating CFTC regulations as charged.

The order entered today finds that after the 2017 order, Citi failed to report LEIs for swap transactions properly and failed to perform its supervisory duties diligently with respect to LEI swap data reporting, in violation of the cease and desist provisions of the 2017 order. Specifically, today’s order finds that between 2013 to November 2019, Citi misreported LEIs for certain swaps that it reported through a third-party reporting service provider by reporting the counterparty identifier as “Name Withheld,” rather than reporting a valid LEI or a Privacy Law Identifier compliant with available CFTC no-action relief. According to the order, these failures were due in part to Citi failing to supervise the reporting service provider diligently and in part to Citi taking over 18 months to complete upgrades to its internal systems needed for it to properly report counterparty identifier information through the reporting service provider.

The order further finds that until at least September 2020, Citi failed to satisfy the backloading conditions of the available CFTC no-action relief by failing to backload LEIs for live trades to an SDR within 30 days of the expiration of the no-action relief and failing to backload LEIs for expired or terminated trades entirely. The order also finds that Citi’s continued LEI reporting failures resulted in part from a failure to supervise its swap dealer activities diligently with respect to LEI swap data reporting.

The Division of Enforcement staff members responsible for this case are Devin Cain, Alejandra de Urioste, Trevor Kokal, Candice Aloisi, Lenel Hickson Jr., and Manal M. Sultan. Tom Guerin, David Aron, and Richard Mo from the Division of Data assisted with this matter.