Washington, D.C. — The Commodity Futures Trading Commission today issued an order simultaneously filing and settling charges against Australia and New Zealand Banking Group Ltd. (ANZ), a financial services firm provisionally registered as a swap dealer for violating its supervision obligations for failing to ensure its spoofing surveillance tool was operating effectively.
During the course of a CFTC investigation into ANZ’s trading activity, ANZ disclosed to CFTC staff that a surveillance tool ANZ used to monitor for spoofing activity by its traders was not operating effectively for futures data supplied by one vendor from November 2019 to June 2020 (First Gap Period) and then again from November 2020 to February 2021 (Second Gap Period).
"ANZ admitted the facts in the order. The order requires ANZ to pay a $500,000 civil monetary penalty and to cease and desist from violating the Commodity Exchange Act and CFTC regulations as charged."
The surveillance tool was run against trading in Eurodollar futures on the Chicago Mercantile Exchange, which ANZ used to hedge its swap positions. The tool's malfunction during the two Gap Periods resulted in thousands of orders not being timely surveilled for spoofing, leading to a substantial number of missed surveillance alerts.
"In accepting ANZ’s offer, the CFTC recognized ANZ’s substantial cooperation with the Division of Enforcement’s investigation of this matter."
ANZ took steps to address the issue by correcting the timing mismatch as soon as it became aware of it and implementing additional safeguards to prevent a recurrence. The CFTC acknowledged ANZ’s remediation efforts, leading to a reduced penalty in recognition of their cooperation and actions to rectify the situation.
"The CFTC appreciates the assistance of the Australian Securities and Investments Commission and the Hong Kong Securities and Futures Commission."
The Division of Enforcement staff responsible for this matter includes Devin Cain, Trevor Kokal, Jordon Grimm, Alejandra de Urioste, Lenel Hickson, Jr., and Manal Sultan, along with former staff member Steven I. Ringer.
