CFTC v. Deutsche Bank AG

In September 2015, the Commodity Futures Trading Commission (CFTC) (plaintiff) initiated an administrative proceeding against Deutsche Bank AG (defendant), alleging that Deutsche Bank failed to report certain data related to swaps as required by the Dodd-Frank Act, failed to investigate messages received from the swap-data repository, and chronically failed to address technological issues with its reporting system. Deutsche Bank hired a consultant to assist with addressing its swap-data-reporting problems. Deutsche Bank also agreed to pay a $2.5 million fine, take certain remediation measures, and periodically submit compliance reports to the CFTC. However, even after these measures were taken, reporting problems continued. In April 2016, Deutsche Bank’s reporting system crashed, resulting in Deutsche Bank not reporting any swap data for five days. Deutsche Bank subsequently discovered problems relating to its Business Continuity and Disaster Recovery Plan. It also became apparent that Deutsche Bank had issues relating to its reporting of real-time data for foreign-exchange swaps. On August 16, the CFTC filed an enforcement action in federal district court against Deutsche Bank under the Dodd-Frank Act. Simultaneous with its filing of the complaint, the CFTC submitted a proposed consent order of preliminary injunction and other equitable relief. The proposed consent order provided for the appointment of an independent monitor tasked with identifying and evaluating swap-data-reporting problems. The independent monitor would also oversee the implementation of remedial efforts. The CFTC argued that the appointment of the independent monitor was in the public interest because it would serve to ensure fairness in the marketplace.