Citigroup Inc.C has agreed to pay $550,000 to the Commodity Futures Trading Commission ("CFTC"), as penalty for violations in reporting swap transaction and absence of proper reporting procedure since April 2015 to December 2016.
Citibank and London-based Citigroup Global Markets, two subsidiaries of Citigroup, have been charged for improper reporting of Legal Entity Identifier data for swap transactions. They have also been accused of failing to remove errors in such data. However, the commission added that the company cooperated well during the investigation.
Citigroup reported the trades as "name withheld" instead of identifying the parties involved in the transaction. The regulator also said that the company's errors were a result of a design flaw in its swap data reporting system.
Swap reporting became mandatory since 2010 Dodd-Frank was passed. The law made it compulsory to report such transactions to regulators so as to keep a track of derivative prices. Also, the aim was to prevent uncertainty in the derivatives markets.
Many companies have faced troubles over the years with regard to reporting trades quickly and with accuracy using technology. In 2016, the CFTC had fined a number of banks such as Deutsche Bank AG DB , JPMorgan Chase & Co. JPM and Barclays PLC BCS over failure to report derivative trades.
In August 2017, Citigroup had agreed to resolve a private U.S. antitrust lawsuit that accused it of rigging London Interbank Offered Rate by paying $130 million.
Lately, Citigroup has been focused on settling all the pending lawsuits and regulatory probes. As a result, the bank's financial performance was adversely impacted by higher legal charges.
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