By Kimberly Chin


Six major financial institutions have agreed to pay a collective $6 million to settle allegations of lax oversight and reporting failures regarding swap activities, the U.S. Commodity Futures Trading Commission has said.

The six banks were HSBC Holdings PLC's (HSBC) HSBC Bank USA, Societe Generale SA's (SCGLY) Societe Generale International Ltd., Northern Trust Corp. (NTRS), NatWest Markets PLC, Bank of New York Mellon Corp. (BK), and PNC Financial Services Group Inc.'s (PNC) PNC Bank, National Association.

Societe Generale International and Northern Trust were accused of failing to provide adequate supervision of swap activity, and paid the largest fines of the group, the CFTC said Tuesday.

Societe Generale International agreed to pay a $2.5 million penalty for failing to properly report swap data and not ensuring there were proper policies, procedures and supervision in place to monitor such failures.

Separately, Northern Trust agreed to pay a $1 million fine for several CFTC and Commodity Exchange Act violations, as well as for failing to properly report hundreds of thousands of swap transactions.

"We are pleased that the CFTC recognized our substantial cooperation in this matter, as well as the remediation steps we have already taken," a Northern Trust spokesman said.

The CFTC accused HSBC Bank of violating swap-dealer risk management regulations, marking the first time such an action has been brought by the agency, it said. HSBC Bank agreed to pay $650,000 and other sanctions to settle accusations that it didn't establish appropriate risk-management systems for its swap activities and for failing to properly report swap activities.

The other banks agreed to pay separate fines ranging from $300,000 to $850,000.

"Accurate reporting is essential to effective fulfillment of the regulatory functions of the CFTC, including meaningful surveillance and enforcement programs," CFTC's Director of Enforcement James McDonald said in prepared remarks.

Through a spokeswoman NatWest said it acknowledges the CFTC's findings and "has now put this right, having co-operated on this matter with the CFTC and taken substantial action to address the issue."

Representatives at HSBC, Societe Generale, BNY Mellon and PNC didn't immediately respond to requests for comment.

All of the banks agreed to the settlements without admitting or denying the CFTC's findings, the agency said.


Write to Kimberly Chin at


(END) Dow Jones Newswires

October 01, 2019 21:55 ET (01:55 GMT)

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