September 13, 2019 / 10:03 PM / 2 months ago

New Jersey brokerage firm to pay $13 million to settle federal allegations: U.S. CFTC

WASHINGTON (Reuters) - A New Jersey-based brokerage will pay $13 million to settle charges that it failed to supervise employee conduct during telephone trades and made false or misleading statements to a regulator, the U.S. Commodities Futures Trading Commission (CFTC) said on Friday.

Tullett Prebon Americas, Inc. did not admit to or deny the regulator’s charges, the CFTC said, but agreed to pay the fine and to implement new software to monitor trades brokered by its trading desk.

It also agreed to enhance its review of “voice-brokering,” including a random review process.

The Tullett brokers’ practice involved receiving bids and offers from customers who then communicate those bids and offers to other Tullett customers, the CFTC said.

While the firm had measures in place to discourage the miscommunication of trades, in 2011 an employee raised concerns to Tullett’s compliance team about certain brokers who were violating the measure, which the firm ignored, the CFTC said.

The case comes as financial regulators seek to crack down on manipulative behavior within firms it oversees.

“The CFTC is devoted to ensuring price transparency and competition in all markets, whether electronically traded futures contracts or voice-brokered swaps,” said James McDonald, the CFTC’s enforcement director.

Tullett agreed to pay an $11 million civil monetary penalty and to cease and desist from violating CFTC regulations, the agency said. It will also pay a $2 million civil monetary penalty for making false or misleading statements to the regulator during its investigation.

Reporting by Katanga Johnson; Editing by Daniel Wallis

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