March 23, 2016

CFTC Orders JPMorgan Ventures Energy Corp. and JPMorgan Chase Bank, N.A. to Pay a $225,000 Penalty for Inaccurate Large Trader Reports for Physical Commodity Swaps Positions

Washington - The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against JPMorgan Ventures Energy Corp. (JPMVE) and JPMorgan Chase Bank, N.A. (JPMCB) (collectively, Respondents), for failing to comply with their obligations to submit accurate large trader reports (LTRs) for physical commodity swap positions, in violation of Section 4s(f) of the Commodity Exchange Act (CEA) and CFTC Regulations 20.4 and 20.7.

The CFTC Order requires the Respondents to pay, jointly and severally, a $225,000 civil monetary penalty and to cease and desist from committing further violations of the CEA and CFTC Regulations, as charged.

As stated in the Order, large trader reporting for physical commodity swaps is essential to the CFTC’s ability to conduct effective surveillance of markets in U.S. physical commodity futures and economically equivalent swaps. The Order makes clear that as of March 1, 2013, swap dealers required to submit LTRs are expected to be in full compliance with the requirements governing LTRs set forth in Regulations 20.4 and 20.7, in conjunction with further instructions provided in the CFTC’s Division of Market Oversight Part 20 Guidebook.

The Order finds that during the period from at least March 1, 2013 through April 30, 2014, the Respondents filed LTRs that routinely contained errors. The Order finds that these errors included: (1) reporting the underlying commodity, futures equivalent months, and currency value strike price in the wrong data fields; (2) reporting futures contract equivalents, commodity units, and notional values that were incorrect or missing; (3) providing identifying information for principals that attributed positions to the wrong entities; and (4) incorrectly reporting counterparty names. In addition, the Order finds that the Respondents failed to submit LTRs on two days.

As noted in the Order, the Respondents have made modifications to their data processing and reporting systems as necessary to comply with their LTR reporting requirements, have corrected errors as they were identified, and have submitted corrected historical LTRs.

CFTC Division of Market Oversight staff members responsible for this matter are Matthew Hunter, Kenneth Danger, and Lynn Riggs. CFTC Division of Enforcement staff members responsible for this matter are Christopher Reed, Stephen Turley, Michael Solinsky, Thomas Simek, and Charles D. Marvine.

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Last Updated: March 23, 2016