CFTC orders Piper Sandler to pay $2M for recordkeeping, supervision failures

The Commodity Futures Trading Commission today issued an order simultaneously filing and settling charges against Piper Sandler Hedging Services LLC, an introducing broker, for failing to maintain and preserve records that were required to be kept under CFTC recordkeeping requirements, and failing to diligently supervise matters related to its business as a CFTC registrant. The order requires Piper Sander to pay a $2M civil monetary penalty; to cease and desist from further violations of recordkeeping and supervision requirements; and to engage in specified remedial undertakings. Piper Sandler admits the facts detailed in the order. The order finds that from at least 2019 to the present, Piper Sandler employees, including those at senior levels, communicated using unapproved communication methods, including messages sent via personal text. The firm was required to keep certain of these written communications because they related to the firm’s business as a CFTC registrant. These written communications generally were not maintained and preserved by Piper Sandler, and the firm generally would not have been able to provide them promptly to the CFTC if and when requested. The order further finds the use of unapproved communication methods violated Piper Sandler’s internal policies and procedures, which broadly prohibited business-related communication taking place via unapproved methods. Further, some of the same supervisory personnel responsible for ensuring compliance with the firm’s policies and procedures themselves used non-approved methods of communication to engage in business-related communications, in violation of firm policy.