October 20, 2015
CFTC Orders BNP Paribas Securities Corp. to Pay a $140,000 Penalty to Settle Charges of Improper Investment of Customer Segregated Funds
Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order instituting and simultaneously settling charges against BNP Paribas Securities Corp. (BNPP), a registered Futures Commission Merchant (FCM) based in New York, New York, for violating the CFTC’s Regulations governing concentration limits applicable to the investment of segregated commodity customer funds. The CFTC Order requires BNPP to pay a $140,000 civil monetary penalty and to cease and desist from violating CFTC Regulations, as charged. The Order also requires that BNPP must regularly review its policies and procedures and provide training to ensure compliance with applicable regulations.
The Order finds that on three occasions, in or about November and December 2014, BNPP violated the CFTC Regulations governing concentration limits applicable to the investment of segregated commodity customer funds. BNPP reported two of the violations to the CFTC and an additional violation was discovered by BNPP’s designated Self-Regulatory Organization, CME Group Inc. On two of the three days, BNPP invested more than 10 percent of segregated customer funds in an individual money market mutual fund, in violation of Regulation 1.25(b)(3)(ii)(D), according to the Order.
The Order further finds that on two of the three days, BNPP invested more than 50 percent of segregated customer funds in money market mutual funds, in violation of Regulation 1.25(b)(3)(i)(F).
The Order states that none of the violations resulted in any customer losses.
In the Order, the CFTC recognizes BNPP’s cooperation during the CFTC’s investigation and that BNPP voluntarily undertook remedial action to strengthen its policies and procedures related to compliance with the applicable regulations.
The CFTC appreciates the assistance of the CME Group Inc. in this matter.
The CFTC’s Division of Enforcement thanks Shoshana Feldman and Annette Vitale of the Division of Swap Dealer and Intermediary Oversight. The CFTC Division of Enforcement staff members responsible for this case are Neel Chopra, Patryk J. Chudy, Lenel Hickson, Jr. and Manal M. Sultan.
Last Updated: October 20, 2015