FCM Settles CFTC Benchmark Manipulation Charges

Deutsche Bank Securities Inc. ("DBSI") agreed to pay a $70 million fine to settle CFTC charges that it attempted to manipulate the U.S. Dollar International Swaps and Derivatives Association Fix, a global benchmark referenced in several interest rate products. DBSI neither admitted nor denied the findings in the CFTC Order.

The CFTC alleged that DBSI traders and swaps brokers coordinated with each other in order to impact the rate near the critical fixing time. The CFTC claimed that the traders were attempting to benefit the firm's proprietary derivatives positions.

Commentary / Nihal Patel

One notable aspect of recent CFTC settlements is that the CFTC has reinstated a practice of providing that the relevant enforcement action will not result in a disqualification under SEC Regulation A and Regulation D. The CFTC said that it does so having "considered factors similar to those considered by the SEC when it issues waivers of disqualification...." See footnote 8