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CFTC Orders Barclays to Pay $560K Penalty for Inaccurate Large Trader Reports

The U.S. Commodity Futures Trading Commission (CFTC) has ordered Barclays Bank plc to pay a $560,000 civil penalty for failing to submit accurate large trader reports (LTR) for physical commodity swap positions, including transactions involving natural gas and crude oil.

"Without admitting or denying any of the findings or conclusions," Barclays has agreed to theorder, according to CFTC.

CFTC found that from July 2012 through March 2013 Barclays submitted LTRs with incorrect position information and Commodity Reference Price indicators for certain types of transactions. Errors in the LTRs included missing data and data presented in a format inconsistent with CFTC requirements, according to the order.

"Subsequently in 2014, Barclays submitted certain LTRs containing inaccurate position information caused by missing or inaccurate prices in crude oil, natural gas, gasoline, heating oil, and agricultural products," CFTC said. Some of the incorrect information came from external vendors, the agency said.

"As a result of these errors, Barclays submitted LTRs that inaccurately reported Barclays' positions in various commodities. Moreover, in many instances, the data processing and reporting systems used by Barclays to generate the LTRs identified potential issues but failed to correct the errors before Barclays first submitted the LTRs" to CFTC's Division of Market Oversight (DMO).

Barclays subsequently detected the errors, self-reported them to DMO, and submitted some corrected reports. However, between July 2012 and November 2012, the London-based bank "failed to keep records as required and was unable to submit complete corrected reports due to the inadvertent deletion of some of the underlying data."

Barclays cooperated in the matter, communicating with DMO regarding issues with the LTRs, analyzing past reports and modifying its data processing and reporting systems, CFTC said.

In 2013 Barclays ran afoul of the Federal Energy Regulatory Commission, which ordered the company and four of its traders to pay $453 million in civil penalties and disgorge $34.9 million, plus interest, in unjust profits for manipulating electric power prices in California and other western markets between November 2006 and December 2008 (see Daily GPI, July 17, 2013). Subsequently, Barclays said it was dropping most of its commodity trading, and in 2015 it put all of its North American physical natural gas assets up for sale (see Daily GPI, July 2, 2015).

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