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ARTICLE · 13 SEPTEMBER 2019

FCM Settles CFTC Charges For Providing Insufficient Audit Trail Data

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A registered futures commission merchant settled CFTC charges for failing to provide sufficient audit trail data, which "substantially delayed" a CFTC Division of Enforcement ("Division")

United StatesFinance and Banking
Hogan Lovells Cadwalader
Hogan Lovells Cadwalader
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A registered futures commission merchant settled CFTC charges for failing to provide sufficient audit trail data, which "substantially delayed" a CFTC Division of Enforcement ("Division") investigation.

According to the CFTC, Merrill Lynch, Pierce, Fenner & Smith Inc. ("Merrill Lynch") failed to fulfill Division requests for audit trail data for three years. The CFTC found that the data provided was also flawed. The CFTC stated that Merrill Lynch's failure to provide adequate audit trail data was due to its lack of adequate procedures for responding to routine regulatory requests. Merrill Lynch was also charged with failure to supervise.

To settle the CFTC charges, Merrill Lynch agreed to pay a $300,000 civil monetary penalty, and to "revise its internal process" to fulfill regulatory data requests.

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