The US Commodity Futures Trading Commission (CFTC) said on Thursday it has ordered Chicago-based introducing broker (IB) E-Trade Securities and futures commission merchant (FCM) E-Trade Clearing, both part of multi-asset brokerage holding company E-Trade Financial Corp., to jointly pay $280,000 civil monetary penalty not preserving and maintaining required records.
The regulator has found that the two entities did not comply with applicable record-keeping rules and failed to diligently supervise. E-Trade Securities did not preserve and maintain certain audit trail logs for their customers between October 2009 and 25 January, 2014, while E-TRADE Clearing did not preserve and maintain customer audit trail logs after becoming registered as a Futures Commission Merchant in February 2013.
E-Trade Clearing has further violated US laws by failing to implement policies and procedures to ensure the retention of these records and failing to respond to a previous warning from its vendor that it did not preserve these records.
The CFTC has ordered the two violators to cease and desist from further violating the US laws and has required them to improve their record-keeping procedures by updating their policies and procedures and providing appropriate training to officers and employees regarding regulatory requirements.
E-Trade Securities and E-Trade Clearing are affiliate companies of New York-based E-Trade Financial Corp., which offers various financial services, online brokerage and banking services. The holding company works primarily with retail clients through its 30 offices across the US.