U.S. CFTC penalizes UBS $500,000 for failing to retain audio recordings
Reuters
Published Oct 14, 2021 10:39AM ET
Updated Oct 14, 2021 11:41AM ET
By Kanishka Singh
(Reuters) -The U.S. Commodity Futures Trading Commission said on Thursday it sanctioned banking group UBS AG $500,000 for failing to retain certain audio recordings for the time required under regulations.
"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. The order requires UBS to pay a $500,000 civil monetary penalty.
As of July 2019, UBS began prematurely deleting, after only one day of retention, files that included voice recordings containing pre-execution swaps trade information that were required to be retained for one year, the CFTC said.
It said a UBS technology analyst believed the voice recordings were test files that did not need to be retained and re-designated those files which reset the retention period from five years to one day, the CFTC added.
In December 2019, UBS inadvertently learned about the premature deletion of these audio files from its systems. The bank then did an internal review. The analyst's error resulted in deletion of over 1,000 hours, or roughly 2.76% of total U.S. recorded volume, during July 8, 2019 through Dec. 23, 2019.
The deleted files included voice recordings containing pre-execution swaps information such as quotes, solicitations, bids, offers, instructions, trading, and prices that lead to the execution of swaps, all of which are required by CFTC regulations to be retained.
Upon discovering its potential violation of CFTC regulations, UBS promptly self-reported this violation to CFTC, the commission said, adding that the bank cooperated in the investigation.
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