Enforcement trends

8 September 2017


CFTC fines Bank of Tokyo for spoofing but rewards bank for cooperation

On Aug. 7, the CFTC announced a settlement with The Bank of Tokyo-Mitsubishi UFJ for engaging in "multiple acts of spoofing" in interest rate futures listed on the Chicago Mercantile Exchange and the Chicago Board of Trade. The spoofing activity was carried out by a trader in the bank's Toyko office and mainly took place in 2010 and 2011, according to the CFTC.

The bank agreed to pay a fine of $600,000 without admitting or denying the CFTC's findings. The CFTC commented that the penalty was "substantially reduced" because of certain actions taken by the bank. In particular, the bank voluntarily reported the misconduct to the agency and implemented "remedial measures and process improvements" to prevent future misconduct of this type, the agency said.

"This case shows the benefits of self-reporting and cooperation, which I anticipate being an important part of our enforcement program going forward,” said James McDonald, the CFTC’s director of enforcement. “When market participants discover wrongdoing, we want to incentivize them to voluntarily report it and to cooperate with our investigation, as the Bank of Tokyo did here." 

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