CFTC: From 2018-2023, Bank of New York Mellon repeatedly failed to correctly report at least 5,000,000 swap transactions & failed to properly supervise its swap dealer business with respect to swap data reporting & monitoring.

The Commodity Futures Trading Commission (CFTC) has fined The Bank of New York Mellon (BNYM) $5 million for repeatedly failing to accurately at least five million swap transactions and for inadequate supervision of its swap dealer business. These violations persisted despite a prior CFTC order against BNYM in 2019 for similar issues [See CFTC Release Nos. 8033-19 and 8042-19].

Between 2018 and 2023, BNYM failed to correctly report at least five million swap transactions, violating the CFTC’s 2019 order that required the bank to cease such violations.

BNYM failed to supervise its swap dealer business, lacking policies to monitor voice and non-English e-communications of its associated persons (APs), as required by the Commodity Exchange Act (CEA) and CFTC regulations.

Penalty?:

CFTC fines BNY Mellon $5M for inaccurate swap reporting and inadequate oversight from 2018 to 2023, despite a 2019 warning order....

How could this impact GameStop?:

The failure to accurately report millions of swap transactions over a long period suggests that critical information regarding market positions and activities was not disclosed or misrepresented entirely. This lack of transparency can lead to a distorted market view, affecting GameStop's price if party to these swaps.

BNYM's failure to properly supervise its swap dealer business raises concerns about the reliability and integrity of the information coming from such an institution.

The fact that BNYM was previously fined in 2019 for similar issues but continued to violate reporting requirements is troubling. This pattern of non-compliance suggests systemic issues within BNYM, making it more likely that any negative impact on GameStop could be ongoing and not just a one-time occurrence.

Since swaps can be used to hedge, speculate, or even manipulate market prices, if BNYM's reporting failures involved significant swap positions related to GameStop, there would be adverse effects on its market price, liquidity, or volatility...

TLDRS:

• The CFTC fined The Bank of New York Mellon (BNYM) $5 million for failing to accurately report at least five million swap transactions and for inadequate supervision of its swap dealer business.
• These violations persisted from 2018 to 2023, despite a prior 2019 CFTC order that required BNYM to cease such violations.
• BNYM lacked policies to monitor voice and non-English e-communications of its associated persons (APs), which is required by the Commodity Exchange Act (CEA) and CFTC regulations.
• The $5 million penalty reflects BNYM’s self-reporting, remediation efforts, and cooperation with the CFTC’s investigation.
  • BNYM has also hired an independent compliance consultant to improve its compliance program.

Potential Impact on GameStop:

• The failure to accurately report millions of swap transactions suggests that critical market information may have been misrepresented, potentially distorting the market view and affecting GameStop’s price if it was involved in these swaps.
• BNYM's inadequate supervision raises concerns about the reliability and integrity of information, which could negatively impact GameStop if related to its market activities.
• BNYM’s repeated non-compliance, despite previous fines, indicates systemic issues that could mean any adverse effects on GameStop are ongoing rather than isolated incidents.
• Swaps can influence market prices, liquidity, or volatility; if BNYM's reporting failures involved significant swap positions related to GameStop, there would definitely be negative consequences for the company’s market performance!