Bnp Paribas Asset Management Usa, Inc.

Event Detail: ONE COUNT OF CONSPIRACY TO VIOLATE SECTION 1 OF THE SHERMAN ACT UNDER TITLE 15, UNITED STATES CODE, SECTION 1. BNP PARIBAS USA, INC. ("BNPP USA") ENTERED A GUILTY PLEA ON THE COUNT. Status: Final Disposition: ON JANUARY 25, 2018, BNPP USA PLEADED GUILTY TO A ONE-COUNT INFORMATION (THE "INFORMATION") IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK (THE "DISTRICT COURT"), PURSUANT TO A PLEA AGREEMENT WITH THE U.S. DEPARTMENT OF JUSTICE. ON MAY 30. 2018 THE DISTRICT COURT SENTENCED BNPP USA TO A FINE OF $90 MILLION AND A $400 SPECIAL ASSESSMENT. JUDGMENT WAS ENTERED ON JUNE 4, 2018. Summary: AS CHARGED IN THE INFORMATION, BNPP USA, THROUGH ONE OF ITS TRADERS, AGREED WITH OTHER FOREIGN EXCHANGE DEALERS TO COORDINATE ITS TRADING IN CERTAIN EMERGING MARKETS CURRENCIES. BNPP USA WAIVED INDICTMENT AND AGREED TO BE CHARGED IN A ONE-COUNT CRIMINAL INFORMATION, FILED IN THE DISTRICT COURT, CHARGING BNPP USA WITH ENGAGING IN A COMBINATION AND CONSPIRACY TO SUPPRESS AND ELIMINATE COMPETITION BY FIXING PRICES FOR CENTRAL AND EASTERN EUROPEAN, MIDDLE EASTERN, AND AFRICAN CURRENCIES TRADED IN THE UNITED STATES AND ELSEWHERE, THROUGH ONE OF ITS TRADERS, FROM SEPTEMBER 2011 AND CONTINUING UNTIL JULY 2013, IN VIOLATION OF THE SHERMAN ANTITRUST ACT, 15 U.S.C. § 1.

Event Detail: ONE COUNT OF CONSPIRACY TO VIOLATE THE INTERNATIONAL EMERGENCY ECONOMIC POWERS ACT UNDER TITLE 50, UNITED STATES CODE, SECTIONS 1702 AND 1705 ("IEEPA"), AND THE TRADING WITH THE ENEMY ACT, TITLE 50, UNITED STATES CODE APPENDIX, SECTIONS 3, 5, AND 16 ("TWEA"), AND THE EXECUTIVE ORDERS AND REGULATIONS ISSUED THEREUNDER. BNP PARIBAS S.A. ("BNPP") ENTERED A GUILTY PLEA ON BOTH COUNTS. Status: Final Disposition: ON JULY 9, 2014, BNPP PLEADED GUILTY TO A ONE COUNT INFORMATION IN UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK (THE "DISTRICT COURT"). PURSUANT TO A PLEA AGREEMENT, BNPP FORFEITED A TOTAL OF APPROXIMATELY $8.9 BILLION, WHICH WAS CREDITED AGAINST PAYMENTS MADE BY BNPP IN CONNECTION WITH A CONCURRENT SETTLEMENT OF A RELATED CRIMINAL ACTION BROUGHT BY THE DISTRICT ATTORNEY OF THE COUNTY OF NEW YORK, AND RELATED REGULATORY ACTIONS BROUGHT BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, THE NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES, AND THE UNITED STATES DEPARTMENT OF THE TREASURY'S OFFICE OF FOREIGN ASSETS CONTROL. THE FORFEITURE PAYMENT WAS DUE AND PAYABLE BY JULY 30, 2014. ON MAY 1, 2015, THE DISTRICT COURT ENTERED A FINAL JUDGMENT OF CONVICTION AGAINST BNPP, WHILE REQUIRING REMEDIES THAT ARE MATERIALLY THE SAME AS THOSE SET FORTH IN THE PLEA AGREEMENT, INCLUDING A TERM OF PROBATION OF FIVE YEARS AND AN OBLIGATION OF CONTINUED COOPERATION WITH THE U.S. DEPARTMENT OF JUSTICE. Summary: FROM AT LEAST 2004 THROUGH 2012, BNPP KNOWINGLY AND WILLFULLY MOVED OVER $8.8 BILLION THROUGH THE U.S. FINANCIAL SYSTEM ON BEHALF OF SUDANESE, IRANIAN AND CUBAN SANCTIONED ENTITIES, IN VIOLATION OF U.S. ECONOMIC SANCTIONS. BNPP WAIVED INDICTMENT AND AGREED TO BE CHARGED IN A ONE-COUNT CRIMINAL INFORMATION, FILED IN FEDERAL COURT IN THE SOUTHERN DISTRICT OF NEW YORK, CHARGING BNPP WITH KNOWINGLY AND WILLFULLY CONSPIRING TO COMMIT VIOLATIONS OF IEEPA AND TWEA. BNPP AGREED TO PLEAD GUILTY TO THE INFORMATION, TO ENTER INTO A WRITTEN PLEA AGREEMENT, AND TO ACCEPT RESPONSIBILITY FOR ITS CRIMINAL CONDUCT.

Event Detail: ONE COUNT OF FALSIFYING BUSINESS RECORDS IN THE FIRST DEGREE, IN VIOLATION OF NEW YORK PENAL LAW § 175.10, A CLASS E FELONY, AND ONE COUNT OF CONSPIRACY IN THE FIFTH DEGREE, IN VIOLATION OF NEW YORK PENAL LAW § 105.05(1), A CLASS A MISDEMEANOR. BNP PARIBAS S.A. ("BNPP") ENTERED A GUILTY PLEA ON BOTH COUNTS. Status: Final Disposition: ON JUNE 30, 2014, BNPP PLEADED GUILTY TO A TWO-COUNT INFORMATION IN THE SUPREME COURT OF THE CITY OF NEW YORK, COUNTY OF NEW YORK (THE "SUPREME COURT"). PURSUANT TO A PLEA AGREEMENT, BNPP FORFEITED A TOTAL OF APPROXIMATELY $8.9 BILLION, WHICH WAS CREDITED AGAINST PAYMENTS MADE BY BNPP IN CONNECTION WITH A CONCURRENT SETTLEMENT OF A RELATED CRIMINAL ACTION BROUGHT BY THE OFFICE OF THE UNITED STATES ATTORNEY FOR THE SOUTHERN DISTRICT OF NEW YORK AND THE ASSET FORFEITURE AND MONEY LAUNDERING SECTION OF THE CRIMINAL DIVISION OF THE UNITED STATES DEPARTMENT OF JUSTICE, AND RELATED REGULATORY ACTIONS BROUGHT BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, THE NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES, AND THE UNITED STATES DEPARTMENT OF THE TREASURY'S OFFICE OF FOREIGN ASSETS CONTROL. THE FORFEITURE PAYMENT WAS DUE AND PAYABLE BY JULY 30, 2014. ON APRIL 15, 2015, BNPP WAS SENTENCED BY THE SUPREME COURT TO A THREE-YEAR CONDITIONAL DISCHARGE, IN LINE WITH THE PLEA AGREEMENT, REQUIRING BNPP TO IMPLEMENT COMPLIANCE PROCEDURES AND TRAINING, AMONG OTHER THINGS. Summary: FROM AT LEAST 2004 THROUGH 2012, BNPP KNOWINGLY AND WILLFULLY MOVED OVER $8.8 BILLION THROUGH THE U.S. FINANCIAL SYSTEM ON BEHALF OF SUDANESE, IRANIAN AND CUBAN SANCTIONED ENTITIES, IN VIOLATION OF U.S. ECONOMIC SANCTIONS. BNPP WAIVED INDICTMENT AND AGREED TO BE CHARGED IN A TWO-COUNT FELONY SUPERIOR COURT INFORMATION, CHARGING BNPP WITH THE CRIME OF FALSIFYING BUSINESS RECORDS IN THE FIRST DEGREE AND CONSPIRACY IN THE FIFTH DEGREE. BNPP AGREED TO PLEAD GUILTY TO THESE CRIMES AND ACCEPT RESPONSIBILITY FOR ITS CRIMINAL CONDUCT, TO CONTINUE TO COOPERATE, AND TO ENTER INTO A WRITTEN PLEA AGREEMENT.

Allegations: FOLLOWING A REVIEW CARRIED OUT BY THE AMF THAT COMMENCED IN JUNE 2018 ON THE MARKETING OF CERTAIN REAL ESTATE AND COMPLEX DEBT FINANCIAL INSTRUMENTS BY BNP PARIBAS, ACTING AS AN INVESTMENT SERVICES PROVIDER, TO RETAIL BANKING CLIENTS IN 2017, THE AMF POINTED OUT CERTAIN DEFAULTS REGARDING (I) THE RECORD-KEEPING OF INVESTMENT ADVICE PROVIDED TO CLIENTS, AND (II) THE EFFECTIVENESS OF CONTROL SYSTEMS RELATING TO THE PROVISION OF INVESTMENT ADVICE. Status: Final Sanction Detail: ON DECEMBER 17, 2019, BNP PARIBAS ENTERED INTO A SETTLEMENT AGREEMENT ("ACCORD DE COMPOSITION ADMINISTRATIVE") WITH THE AMF PURSUANT TO WHICH BNP PARIBAS (I) AGREED TO PAY TO THE STATE TREASURY A SUM OF 600,000 EUROS AND (II) GAVE UNDERTAKINGS TO (A) FURTHER IMPROVE THE RECORD-KEEPING OF INVESTMENT ADVICE PROVIDED TO CLIENTS, IN COMPLIANCE WITH REGULATIONS, AND (B) ESTABLISH AND MAINTAIN OPERATIONAL AND EFFECTIVE COMPLIANCE AND INTERNAL CONTROL SYSTEMS. THIS SETTLEMENT AGREEMENT WAS APPROVED BY THE BOARD OF THE AMF AND THEN RATIFIED BY THE ENFORCEMENT COMMITTEE OF THE AMF AND PUBLISHED ON APRIL 7, 2020. Summary: ON DECEMBER 17, 2019, BNP PARIBAS ENTERED INTO A SETTLEMENT AGREEMENT ("ACCORD DE COMPOSITION ADMINISTRATIVE") WITH THE AMF PURSUANT TO WHICH BNP PARIBAS (I) AGREED TO PAY TO THE STATE TREASURY A SUM OF 600,000 EUROS AND (II) GAVE UNDERTAKINGS TO (A) FURTHER IMPROVE THE RECORD-KEEPING OF INVESTMENT ADVICE PROVIDED TO CLIENTS, IN COMPLIANCE WITH REGULATIONS, AND (B) ESTABLISH AND MAINTAIN OPERATIONAL AND EFFECTIVE COMPLIANCE AND INTERNAL CONTROL SYSTEMS. THIS SETTLEMENT AGREEMENT WAS APPROVED BY THE BOARD OF THE AMF AND THEN RATIFIED BY THE ENFORCEMENT COMMITTEE OF THE AMF AND PUBLISHED ON APRIL 7, 2020.

Allegations: BNPP APPEARS TO HAVE ENGAGED IN A SYSTEMATIC PRACTICE THAT CONCEALED, REMOVED, OMITTED, OR OBSCURED REFERENCES TO, OR THE INTEREST OR INVOLVEMENT OF, SANCTIONED PARTIES IN U.S. DOLLAR SOCIETY FOR SWIFT PAYMENT MESSAGES SENT TO U.S. FINANCIAL INSTITUTIONS. THE SPECIFIC PAYMENT PRACTICES THE BANK UTILIZED IN ORDER TO PROCESS CERTAIN SANCTIONS-RELATED PAYMENTS TO OR THROUGH THE UNITED STATES INCLUDED OMITTING REFERENCES TO SANCTIONED PARTIES; REPLACING THE NAMES OF SANCTIONED PARTIES WITH BNPP'S NAME OR A CODE WORD; AND STRUCTURING PAYMENTS IN A MANNER THAT DID NOT IDENTIFY THE INVOLVEMENT OF SANCTIONED PARTIES IN PAYMENTS SENT TO U.S. FINANCIAL INSTITUTIONS. Status: Final Sanction Detail: BNPP AGREED TO PAY OFAC A SETTLEMENT IN THE AMOUNT OF $963,619,900, WITH SUCH SETTLEMENT DEEMED SATISFIED BY ITS PAYMENT OF A GREATER OR EQUAL AMOUNT IN SATISFACTION OF PENALTIES ASSESSED BY U.S. FEDERAL, STATE, OR COUNTY OFFICIALS ARISING OUT OF THE SAME PATTERN OF CONDUCT. Summary: THE SETTLEMENT AGREEMENT BETWEEN OFAC AND BNPP WAS ENTERED INTO ON JUNE 30, 2014. THE CONDUCT THAT VIOLATED U.S. SANCTIONS HAS CEASED, AND BNPP AGREED TO ESTABLISH AND MAINTAIN POLICIES AND PROCEDURES THAT PROHIBIT AND ARE DESIGNED TO MINIMIZE THE RISK OF RECURRENCE OF SIMILAR CONDUCT IN THE FUTURE.

Allegations: BNPP IMPLEMENTED POLICIES AND PROCEDURES FOR PROCESSING U.S. DOLLAR-DENOMINATED TRANSFERS THROUGH THE NEW YORK BRANCH AND UNAFFILIATED U.S. FINANCIAL INSTITUTIONS IN A MANNER THAT WAS DESIGNED TO CONCEAL RELEVANT INFORMATION REGARDING SUDAN, IRAN, AND CUBA THAT WOULD PERMIT THE INSTITUTIONS AND THEIR REGULATORS TO DETERMINE WHETHER THE TRANSACTIONS WERE LAWFUL AND CONSISTENT WITH NEW YORK STATE AND U.S. LAWS AND REGULATIONS. BNPP'S CONDUCT ALLOWED SANCTIONED COUNTRIES AND ENTITIES, INCLUDING SPECIALLY DESIGNATED NATIONALS, TO ACCESS THE U.S. FINANCIAL SYSTEM AND ENGAGE IN BILLIONS OF DOLLARS OF U.S. DOLLAR-BASED FINANCIAL TRANSACTIONS, SIGNIFICANTLY UNDERMINING THE U.S. SANCTIONS AND EMBARGOS. Status: Final Sanction Detail: BNPP WAS REQUIRED TO PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $2.2434 BILLION, IN ADDITION TO MAKING A PAYMENT OF REPARATIONS AND RESTITUTION TO DFS AND THE STATE OF NEW YORK OF $1.05 BILLION, THE LATTER OF WHICH WAS SATISFIED BY BNPP'S PAYMENT TO THE NEW YORK COUNTY DISTRICT ATTORNEY'S OFFICE. Summary: BNPP WAS REQUIRED TO PAY A CIVIL MONETARY PENALTY AND TO TAKE STEPS TO IMPLEMENT A ONE-YEAR-LONG SUSPENSION, FROM JANUARY 1, 2015 TO DECEMBER 31, 2015, OF CERTAIN U.S. DOLLAR CLEARING SERVICES THROUGH ITS NEW YORK BRANCH (THE "SUSPENSION"). BNPP WAS ALSO PROHIBITED, FOR A PERIOD OF 24 MONTHS FROM THE DATE OF THE ORDER, FROM U.S. DOLLAR CLEARING AS A CORRESPONDENT BANK FOR UNAFFILIATED THIRD PARTY BANKS IN NEW YORK AND LONDON. BNPP MUST NOT CIRCUMVENT THE SUSPENSION IN ANY WAY. THE DFS ORDER ALSO EXTENDED, FOR AN ADDITIONAL TWO YEARS, THE ENGAGEMENT OF AN INDEPENDENT CONSULTANT ("IC"), WHO WAS INITIALLY INSTALLED AS A RESULT OF AN MEMORANDUM OF UNDERSTANDING ENTERED INTO ON AUGUST 19, 2013 BETWEEN BNPP, THE NEW YORK BRANCH, AND THE DFS. THE IC OVERSEES AND EVALUATES BNPP'S REMEDIATION EFFORTS AND THE SUSPENSION. ADDITIONALLY, THE DFS ORDER REQUIRED TERMINATION OR SEPARATION OF THIRTEEN EMPLOYEES, WHO MAY NOT BE RETAINED IN THE FUTURE, DIRECTLY OR INDIRECTLY, AS EITHER AN OFFICER, EMPLOYEE, AGENT, CONSULTANT, OR CONTRACTOR, BY BNPP OR ANY AFFILIATE OF BNPP.

Allegations: THERE HAVE BEEN INVESTIGATIONS INTO THE PRACTICES OF BNPP CONCERNING THE TRANSMISSION OF FUNDS THROUGH THE UNITED STATES ON BEHALF OF OR RELATED TO ENTITIES AND INDIVIDUALS SUBJECT TO SANCTIONS REGIMES IMPOSED UNDER THE INTERNATIONAL EMERGENCY ECONOMIC POWERS ACT, 50 U.S.C. §§ 1701-06, AND THE TRADING WITH THE ENEMY ACT, 50 U.S.C. §§ 5 AND 16, AND THEIR IMPLEMENTING REGULATIONS. BNPP CONDUCTED A REVIEW OF ITS U.S. DOLLAR TRANSACTIONS AND HAS UNDERTAKEN AND IS IMPLEMENTING, BOTH INSIDE AND OUTSIDE THE UNITED STATES, ENHANCEMENTS TO ITS OFAC COMPLIANCE SYSTEMS AND CONTROLS DESIGNED TO ADDRESS THE HISTORICAL DEFICIENCIES IN ITS USD PAYMENT PROCESSING. Status: Final Sanction Detail: UNDER THE FEDERAL RESERVE/ACPR ORDER BNPP WAS REQUIRED TO CONTINUE TO IMPLEMENT IMPROVEMENTS IN ITS OVERSIGHT AND COMPLIANCE PROGRAMS TO COMPLY WITH U.S. LAWS, RULES AND REGULATIONS, AS DISCUSSED BELOW. Summary: THE FEDERAL RESERVE/ACPR ORDER REQUIRED THAT, WITHIN 90 DAYS OF THE ORDER, BNPP MUST SUBMIT TO THE FEDERAL RESERVE AND THE ACPR AN ACCEPTABLE OFAC COMPLIANCE PROGRAM BY BNPP'S GLOBAL BUSINESS LINES (THE "OFAC COMPLIANCE PROGRAM"). THE OFAC COMPLIANCE PROGRAM MUST PROVIDE FOR THE RELOCATION OF A PART OF GROUP FINANCIAL SECURITY TO THE U.S., WHICH WILL BE RESPONSIBLE FOR BNPP'S OFAC COMPLIANCE PROGRAM. WITHIN 90 DAYS OF THE APPROVAL OF THE OFAC COMPLIANCE PROGRAM, BNPP MUST COMPLETE A GLOBAL OFAC RISK ASSESSMENT WITH PARTICULAR ATTENTION PAID TO TRANSACTIONS INVOLVING ITS AFFILIATES, BRANCHES AND SUBSIDIARIES. BNPP MUST ALSO OPERATE ITS U.S. OFFICES IN CONFORMITY WITH THE U.S. FEDERAL BANKING AGENCIES' INTERAGENCY GUIDANCE ON TRANSPARENCY AND COMPLIANCE IN CROSS-BORDER FUNDS TRANSFERS DATED DECEMBER 18, 2009 (SR 09-09), AND ANY FUTURE REVISIONS OR MODIFICATIONS THERETO.

Allegations: BNPP LACKED ADEQUATE TRANSPARENCY, RISK MANAGEMENT, AND LEGAL AND COMPLIANCE REVIEW POLICIES AND PROCEDURES TO ENSURE THAT ACTIVITIES CONDUCTED AT OFFICES OUTSIDE OF THE UNITED STATES COMPLIED WITH APPLICABLE OFAC REGULATIONS AND DEVELOPED AND IMPLEMENTED POLICIES AND PROCEDURES FOR PROCESSING CERTAIN U.S. DOLLAR TRANSFERS THROUGH THE NEW YORK BRANCH (THE "BRANCH") AND THROUGH OTHER UNAFFILIATED U.S. FINANCIAL INSTITUTIONS INVOLVING PARTIES SUBJECT TO OFAC REGULATIONS THAT OMITTED OR CONCEALED RELEVANT INFORMATION FROM PAYMENT MESSAGES THAT WAS NECESSARY FOR THE BRANCH AND OTHER U.S. FINANCIAL INSTITUTIONS TO DETERMINE WHETHER THESE TRANSACTIONS WERE CARRIED OUT IN A MANNER CONSISTENT WITH U.S. LAW. THE UNSAFE OR UNSOUND PRACTICES AND VIOLATIONS OF LAW DESCRIBED ABOVE WARRANTED THE ASSESSMENT OF A CIVIL MONEY PENALTY. Status: Final Sanction Detail: THE ORDER REQUIRED BNPP TO PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $508 MILLION. Summary: THE ORDER REQUIRED BNPP TO PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $508 MILLION. THE ORDER FURTHER PROVIDED THAT BNPP MAY NOT, DIRECTLY OR INDIRECTLY, RETAIN AS EITHER AN OFFICER, EMPLOYEE, AGENT, CONSULTANT, CONTRACTOR OF BNPP OR ANY AFFILIATE OF BNPP, OR IN ANY OTHER CAPACITY, ELEVEN IDENTIFIED INDIVIDUALS. THIS RESTRICTION ALSO APPLIES TO ANY CURRENT OR FORMER EMPLOYEE WHO IS EITHER SEPARATED FROM BNPP OR WHOSE EMPLOYMENT IS TERMINATED BY BNPP AS A RESULT OF ANY FUTURE FORMAL DISCIPLINARY ACTION AGAINST CURRENT EMPLOYEES AS A RESULT OF BNPP'S INTERNAL DISCIPLINARY REVIEW IN CONNECTION WITH THE CONDUCT. THE ORDER REQUIRED BNPP TO CONTINUE TO PROVIDE SUBSTANTIAL ASSISTANCE TO THE JUSTICE DEPARTMENT AND THE FEDERAL RESERVE IN CONNECTION WITH THE INVESTIGATION OF BNPP'S U.S. DOLLAR CLEARING BUSINESS, INCLUDING THE INVESTIGATION OF EMPLOYEES.

Allegations: THE COMMODITY FUTURES TRADING COMMISSION ALLEGED THAT FROM AT LEAST 2014 TO THE PRESENT BNP PARIBAS S.A. AND BNP PARIBAS SECURITIES CORP. FAILED TO (1) MAINTAIN AND PRESERVE OFF-CHANNEL COMMUNICATIONS RELATED TO THE BUSINESS OF THE FUTURE COMMISSION MERCHANT, IN WILLFUL VIOLATION OF SECTIONS 4S(F)(1)(C) AND 4G OF THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS 1.31(B)(4), 1.35, AND 23.201(A); AND (2) REASONABLY SUPERVISE THEIR EMPLOYEES WITH A VIEW TO PREVENTING OR DETECTING CERTAIN OF THEIR EMPLOYEES' AIDING AND ABETTING VIOLATIONS OF SECTIONS 4S(F)(1)(C) AND 4G OF THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS 1.31(B)(4), 1.35, AND 23.201(A), WITHIN THE MEANING OF SECTION 4S(H)(1)(B) OF THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATION 166.3. Status: Final Sanction Detail: BNPP SA, TOGETHER WITH ITS SUBSIDIARY BNPP SEC. CORP, ADMITTED AND ACKNOWLEDGED, FOR PURPOSES OF THE SETTLEMENT ORDER, THAT THEIR CONDUCT VIOLATED THE ACT AND AGREED TO: (A) CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS OR ANY FUTURE VIOLATIONS OF THE ACT, (B) PAY, JOINTLY AND SEVERALLY, A CIVIL MONETARY PENALTY IN THE AMOUNT OF $75,000,000, AND (C) COMPLY WITH CERTAIN CONDITIONS AND UNDERTAKINGS. Summary: ON AUGUST 8, 2023, THE COMMODITY FUTURES TRADING COMMISSION ALLEGED THAT BNP PARIBAS S.A. AND BNP PARIBAS SECURITIES CORP. FAILED TO (1) MAINTAIN AND PRESERVE OFF-CHANNEL COMMUNICATIONS RELATED TO THE BUSINESS OF THE FUTURES COMMISSION MERCHANT, IN WILLFUL VIOLATION OF SECTIONS 4S(F)(1)(C) AND 4G OF THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS 1.31(B)(4), 1.35, AND 23.201(A); AND (2) REASONABLY SUPERVISE THEIR EMPLOYEES WITH A VIEW TO PREVENTING OR DETECTING CERTAIN OF THEIR EMPLOYEES' AIDING AND ABETTING VIOLATIONS OF SECTIONS4S (F)(1)(C) OR 4G OF THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS 1.31(B)(4), 1.35, OR 23.201(A). BNP PARIBAS S.A. AND BNP PARIBAS SECURITIES CORP. ADMITTED TO THE FACTS IN THE SETTLEMENT ORDER, ACKNOWLEDGED THEIR CONDUCT VIOLATED THE COMMODITY EXCHANGE ACT AND AGREED TO (A) CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS OR ANY FUTURE VIOLATIONS OF SECTIONS 4S(F)(1)(C) AND 4G OF THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS 1.31(B)(4), 1.35, AND 23.201(A), (B) PAY A CIVIL MONETARY PENALTY IN THE AMOUNT OF $75,000,000, AND (C) COMPLY WITH CERTAIN UNDERTAKINGS RELATED TO RETENTION OF ELECTRONIC COMMUNICATIONS.

Allegations: THE COMMODITY FUTURES TRADING COMMISSION ("CFTC") ALLEGED THAT, FROM AT LEAST 2016 THROUGH 2021, BNP PARIBAS ("BNPP") FAILED TO CORRECTLY REPORT NUMEROUS SWAP TRANSACTIONS AS REQUIRED BY THE COMMODITY EXCHANGE ACT ("CEA") AND CEA REGULATIONS, AND THAT FROM 2016 THROUGH 2017, BNPP ADJUSTED DAILY MARK DISCLOSURES TO SWAP COUNTERPARTIES ON CERTAIN SWAP TRANSACTIONS IN A MANNER THAT WAS NOT CONSISTENT WITH THE CEA AND CEA REGULATIONS. THE CFTC ALLEGED, CONSEQUENTLY, THAT FROM AT LEAST 2016 UNTIL 2021, BNPP INADEQUATELY SUPERVISED ITS SWAP DEALER. Status: Final Sanction Detail: WITHOUT ADMITTING OR DENYING THE CFTC'S FINDINGS OR CONCLUSIONS, BNPP AGREED TO A FINE OF $6,000,000, WHICH WAS TIMELY PAID. BNPP ALSO AGREED TO MAKE A WRITTEN REPORT WITHIN ONE YEAR OF ENTRY OF THE ORDER TO THE CFTC REGARDING ITS COMPLIANCE WITH THE PROVISIONS OF THE CEA AND CEA REGULATIONS THAT ARE THE SUBJECT OF THE ORDER, WHICH WILL BE CERTIFIED BY A CHIEF COMPLIANCE OFFICER. Summary: ON JULY 5, 2022, THE CFTC ISSUED AN ORDER AGAINST BNPP ALLEGING THAT, FROM AT LEAST 2016 THROUGH 2021, BNPP FAILED TO CORRECTLY REPORT NUMEROUS SWAP TRANSACTIONS AS REQUIRED BY THE CEA AND CEA REGULATIONS, AND THAT FROM 2016 THROUGH 2017, BNPP ADJUSTED DAILY MARK DISCLOSURES TO SWAP COUNTERPARTIES ON CERTAIN SWAP TRANSACTIONS IN A MANNER THAT WAS NOT CONSISTENT WITH THE CEA AND CEA REGULATIONS. THE CFTC ALLEGED, CONSEQUENTLY, THAT FROM AT LEAST 2016 UNTIL 2021, BNPP INADEQUATELY SUPERVISED ITS SWAP DEALER. WITHOUT ADMITTING OR DENYING THE CFTC'S FINDINGS OR CONCLUSIONS, BNPP AGREED TO A FINE OF $6,000,000, WHICH WAS TIMELY PAID. BNPP ALSO AGREED TO MAKE A WRITTEN REPORT WITHIN ONE YEAR OF ENTRY OF THE ORDER TO THE CFTC REGARDING ITS COMPLIANCE WITH THE PROVISIONS OF THE CEA AND CEA REGULATIONS THAT ARE THE SUBJECT OF THE ORDER, WHICH WILL BE CERTIFIED BY A CHIEF COMPLIANCE OFFICER.