A new commissioner at the Commodity Futures Trading Commission (CFTC) believes the agency let a swap execution facility (SEF) affiliate of financial services firm Cantor Fitzgerald off easy when it was fined $1.9 million.

Christy Goldsmith Romero, a former federal law enforcement official who joined the CFTC in March, criticized the agency’s action against BGC Derivative Markets, which was penalized Friday for failing to report nearly 12,500 swap transactions to the regulator and/or the public from 2017-22.

In a statement, Goldsmith Romero said she concurred with the settlement, rather than offering her full support, because she disagreed the fine and the fact BGC did not admit guilt was “sufficient to deter future violations or provide accountability and transparency.”

“A higher penalty and defendant admissions to wrongdoing would serve as a stronger deterrent for [BGC] and other SEFs,” she said. “Further, this case warrants the heightened accountability and transparency that comes with requiring the defendant to admit to its wrongdoing.”

As part of the settlement, BGC agreed to conduct a comprehensive review of its swaps reporting program and implement a reconciliation process for transactions occurring on and reported by the SEF, the CFTC said. BGC must submit a written report on those improvements—signed by its chief executive officer and chief compliance officer—in one year.

The executives must attest BGC’s “reconciliation process and compliance program are reasonably designed to detect and prevent violations of the Commodity Exchange Act and CFTC regulations that are the subject of the order,” the agency said in a press release.

Goldsmith Romero said it was “troubling” the CFTC has announced enforcement actions against multiple firms for swap reporting failures in her six months as a commissioner.

“As a market regulator, we must send a strong message that systemic swap reporting failures are unacceptable,” she said in her statement. “[SEFs] should have a culture of compliance.”

In September, Goldsmith Romero called on her colleagues at the CFTC to require more admissions of guilt as part of settlements.

“Requiring defendants to acknowledge responsibility and wrongdoing to the public is an important enforcement tool that promotes critical public interests. Unfortunately, this tool has become dull with disuse,” Goldsmith Romero said. “… Routine acceptance of neither-admit-nor-deny civil settlements undercuts a regulator’s efforts to seek justice for victims.”

BGC did not respond to a request for comment.

Aaron Nicodemus covers regulatory policy and compliance trends for Compliance Week. He previously worked as a reporter for Bloomberg Law and as business editor at the Telegram & Gazette in Worcester, Mass.

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