Wells Fargo To Pay $14.5M In CFTC Swap Standards Action

The U.S. Commodity Futures Trading Commission (CFTC) announced that Wells Fargo Bank must pay nearly $14.5 million to resolve claims. The bank is accused of violating various swap dealer's business conduct standards in its foreign exchange swaps between August 2014 and May 2018. 

The regulator claimed Wells Fargo entered into a foreign exchange contract looking to swap $4 billion U.S. dollars for $4.347 billion Canadian dollars by using a weighted average rate to price the transaction. Nonetheless, deficiencies in the system made it impossible to calculate the correct weighted average for the trade. 

The CFTC explained that instead of calculating the agreed-upon weighted average price, Wells Fargo chose a rate it considered would be in the range of the actual weighted average, making it suitable to the counterparty. 

Additionally, the bank provided the counterparty with a spreadsheet claiming to calculate the rate. However, it did not reflect the actual trades because of its inability to track other relevant operations. 

Wells Fargo To Pay Monetary Penalties and Restitution

Without admitting or denying the findings, Wells Fargo will pay $10M in civil monetary penalties and $4.48M in restitution, according to the CFTC's order. The bank also agreed to cease violating the commission's business conduct standards. 

According to the CFTC, due to its inability to track spot trades accurately, Wells Fargo gave false information to its counterparty in the swap about Canadian currency trades. Plus, the bank lacked adequate supervision in complying with fair communication standards.

Wells Fargo Cleaned Up Act Since Investigation 

Since May 2018, an internal review was conducted, and the employees involved were fired. A bank representative said the company was pleased to have resolved the matter. 

The CFTC's enforcement director James McDonald stated that the organization would "continue to protect our markets through vigilant investigation and prosecution of misconduct.”

Speak with a CFTC Attorney To Review Your Case 

Dimond Kaplan & Rothstein, P.A. has vast experience representing investors who have lost money as a result of brokerage misconduct. Our firm has achieved significant results, recovering over $100 million in losses throughout the years. We will aggressively pursue claims to recover your losses or damages.

If you are looking for a stock fraud attorney to review your rights and options, the experienced attorneys at Dimond Kaplan & Rothstein, P.A. represent individual and institutional investors who have lost money as a result of securities fraud or brokerage misconduct. 

Contact Dimond Kaplan & Rothstein Today

Our offices are located in Los AngelesNew YorkDetroitWest Palm BeachNaples and Miami, and we represent clients nationwide. Translations services are available.

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