UBS Slapped Fine Of $500,000 By US CFTC For Not Retaining Audio Recordings

The banking group UBS AG was sanctioned this week by the United States Commodity Futures Trading Commission (CGTC) a fine of $500,000 over charges that the bank had not been able to keep in its custody some specific audio recordings till such time that it was required to according to regulations, the agency said.

“The order finds that as a result of failures in UBS’s audio retention systems, the firm deleted over 1,000 hours of audio data after one day, including voice recording files that were required by CFTC regulations to be retained for one year”, the CFTC said in a statement.

UBS has to cough up a payment of a $500,000 civil monetary penalty according ot the order by the CFTC.

The US agency said that UBS had started to prematurely delete the specific audio recordings s of July 2019 after keeping it safe under its fold for just one day. The recordings included files of voice recordings about pre-execution swaps trade information which the bank was supposed to retain for a period of one year.

This happened because one of the technology analysts at YBS thought that the said audio files were test files that did not need to be retained and the files were re-designated which reset the retention period for the files from a period of five years to just one day, the CFTC added.

The incident of the premature deletion of these audio files from its systems was discovered inadvertently by UBS in December 2019. That was followed by and an internal review at the bank. During the period from July 8, 2019 through December 23, 2019, deletion of over 1,000 hours, or roughly 2.76% of total U.S. recorded volume resulted from the error of thee analyst at the bank.

Pre-execution swaps information such as quotes, solicitations, bids, offers, instructions, trading, and prices, were included in eth voice recordings that were deleted by the error of the bank’s analyst, and these deleted information was responsible for the execution of swaps. According to CFTC regulations, the bank was supposed to retain these voice commands and files for a period of one year.

The commission said that this violation of the regulations was swiftly self-reported by the bank to the CFTC as soon as the bank discovered the potential violation caused by the error, and added that there was cooperation from the bank into the investigation of the regulatory violation. 

(Adapted from Reuters.com)

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