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Citi Fined Over Deleted Audio of Traders That CFTC Subpoenaed

Sept. 28, 2020, 5:49 PM

Citigroup Inc. was fined $4.5 million by the U.S.’s main derivatives regulator over a design flaw that led to the deletion of millions of audio files, including trader recordings that were subpoenaed as part of a federal investigation.

In December 2018, the bank notified the Commodity Futures Trading Commission that it had erased more than 2.77 million audio files, including recordings of traders sought a year earlier by the agency. Citigroup, which didn’t admit or deny the regulator’s findings, had assured CFTC enforcement attorneys they had the recordings in question.

“Registrants have obligations to diligently supervise all aspects of their business related to their duties, including all systems used to comply with CFTC record keeping requirements, document requests, and subpoenas,” James McDonald, head of the CFTC’s enforcement division, said in a Monday statement.

Citigroup was aware of the audio-preservation issue as early as 2014, when an employee wrote a memo to senior management explaining the problem was a “ticking time bomb” that could lead to the automatic deletion of audio recordings, according to the CFTC. Despite that warning, the bank didn’t take any steps to improve the system and files were ultimately deleted.

“We are pleased to have the matter resolved,” said Citigroup spokeswoman Danielle Romero-Apsilos in an email.

The CFTC didn’t disclose in its statement why it sought recordings of the traders or how that investigation might have been resolved.

To contact the reporter on this story:
Matt Robinson in New York at

To contact the editors responsible for this story:
Jesse Westbrook at

Gregory Mott

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