UNITED STATES OF AMERICA 

Before the 

COMMODITY FUTURES TRADING COMMISSION 

In the Matter of: 

Wells Fargo Bank NA and Wells 

Fargo Securities LLC, 

Respondents. 

) 

) 

)

) 

) 

) 

) 

) 

) 

) 

CFTC Docket No. 23-36

ORDER INSTITUTING PROCEEDINGS PURSUANT TO 

SECTION 6(c) AND (d) OF THE COMMODITY EXCHANGE ACT, MAKING 

FINDINGS, AND IMPOSING REMEDIAL SANCTIONS

I. INTRODUCTION

The Commodity Futures Trading Commission (“Commission”) has reason to believe that 

from at least 2019 to the present (“Relevant Period”), Wells Fargo Bank NA (“WFBNA”) and 

Wells Fargo Securities LLC (“WFS”) (collectively, “Wells Fargo” or “Respondents”) violated, 

as set forth below, Sections 4g, 4s(f)(1)(C), 4s(g)(1) and (3), and 4s(h)(1)(B) of the Commodity 

Exchange Act (“Act”), 7 U.S.C. §§ 6g, 6s(f)(1)(C), 6s(g)(1), (3), 6s(h)(1)(B), and Commission 

Regulations (“Regulations”) 1.31, 1.35, 23.201(a), 23.202(a)(1) and (b)(1), 23.602(a), and 166.3, 

17 C.F.R. §§ 1.31, 1.35, 23.201(a), 23.202(a)(1), (b)(1), 23.602(a), 166.3 (2022). Therefore, the 

Commission deems it appropriate and in the public interest that public administrative 

proceedings be, and hereby are, instituted to determine whether Respondents engaged in the 

violations set forth herein and to determine whether any order should be issued imposing 

remedial sanctions. 

In anticipation of the institution of an administrative proceeding, Respondents have 

submitted an Offer of Settlement (“Offer”), which the Commission has determined to accept. 

Respondents admit the facts set forth in Section II below, acknowledge that their conduct 

violated the Act and Regulations and consent to the entry of this Order Instituting Proceedings 

Pursuant to Section 6(c) and (d) of the Commodity Exchange Act, Making Findings, and 

Imposing Remedial Sanctions (“Order”), and acknowledge service of this Order.1

1

 Respondents agree that the findings of fact and conclusions of law in this Order shall be taken as true and correct 

and be given preclusive effect without further proof in this proceeding and any other proceeding brought by the 

Commission or to which the Commission is a party or claimant, including but not limited to, a proceeding in 
2 

II. FINDINGS 

The Commission finds the following: 

A. SUMMARY 

 The Act and Regulations impose recordkeeping and supervision requirements on 

Commission registrants to ensure that they responsibly discharge their crucial role in our 

markets. Compliance with these requirements is essential to the Commission’s efforts to 

promote the integrity, resilience, and vibrancy of the U.S. derivatives markets through sound 

regulation. 

During the Relevant Period, Wells Fargo employees, including those at senior levels, 

communicated both internally and externally using unapproved methods, including via personal 

text messages. These written communications were sent and received by Wells Fargo employees 

and included messages related to Wells Fargo’s businesses as Commission registrants that were 

required to be maintained under Commission-mandated recordkeeping requirements. These 

written communications via unapproved methods generally were not maintained and preserved 

by Wells Fargo, and Wells Fargo generally would not have been able to furnish the 

communications promptly to a Commission representative if and when requested. As a result, 

Wells Fargo violated, as set forth below, Sections 4g, 4s(f)(1)(C), and 4s(g)(1) and (3) of the 

Act, 7 U.S.C. §§ 6g, 6s(f)(1)(C), 6s(g)(1), (3), and Regulations 1.31, 1.35, 23.201(a), and 

23.202(a)(1) and (b)(1), 17 C.F.R. §§ 1.31, 1.35, 23.201(a), 23.202(a)(1), (b)(1) (2022). 

 In addition, the widespread use of unauthorized communication methods by Wells 

Fargo’s employees to conduct firm business violated Wells Fargo’s own policies and procedures, 

which prohibited such communications. Wells Fargo did not maintain adequate internal controls 

with respect to the use of unapproved communication methods for business-related 

communications. Indeed, some of the very same supervisory personnel at Wells Fargo 

responsible for ensuring compliance with Wells Fargo’s policies and procedures themselves 

utilized unapproved methods of communication to engage in business-related communications, 

in violation of firm policy. Because Wells Fargo failed to implement a diligent supervisory 

system to ensure compliance with Commission recordkeeping requirements and the firm’s own 

policies and procedures, and because the widespread use of unauthorized communication 

methods resulted in the firm’s failure to maintain Commission-required records, Wells Fargo 

failed to diligently supervise matters related to its business as a Commission registrant in 

violation of Section 4s(h)(1)(B) of the Act, 7 U.S.C. § 6s(h)(1)(B), and Regulations 166.3 and 

23.602(a), 17 C.F.R. §§ 166.3, 23.602(a) (2022), as set forth below. 

B. RESPONDENTS 

Wells Fargo Bank NA is a financial services company with its headquarters in South 

Dakota. Wells Fargo Bank NA has been provisionally registered with the Commission as a 

Swap Dealer since December 31, 2012. 

 

bankruptcy or receivership. Respondents do not consent to the use of the Offer or this Order, or the findings or 

conclusions in this Order, by any other party in any other proceeding.
3 

Wells Fargo Securities LLC is a limited liability company with its headquarters in 

North Carolina. Wells Fargo Securities LLC has been registered with the Commission as a 

Futures Commission Merchant (“FCM”) since June 9, 2004. 

C. FACTS 

In connection with the Commission’s investigation, Wells Fargo conducted a review of 

the use of unapproved communications methods by its employees. That review demonstrated 

that there was widespread and longstanding use of unapproved communication methods by 

employees—including senior-level employees—to engage in firm business. 

Importantly, during the Relevant Period, Wells Fargo’s policies and procedures broadly 

prohibited employees from using unapproved communication methods, such as personal text 

messages, to engage in business-related communications. 

Messages sent through Wells Fargo-approved communications methods were monitored, 

subject to review, and when appropriate, archived. By contrast, messages sent using unapproved 

communication methods, including over personal text messages, were generally not monitored, 

subject to review, or archived. 

As a result of Wells Fargo’s failure to ensure that employees—including supervisors and 

senior-level employees—complied with the firm’s communications policies and procedures, 

Wells Fargo failed to maintain thousands of business-related communications, including 

communications in connection with its commodities and swaps businesses, and thus failed 

diligently to supervise its businesses as Commission registrants. These supervision failures 

resulted in the widespread use of unapproved methods of communication by many Wells Fargo 

employees in violation of the firm’s policies and procedures, as well as a widespread failure to 

maintain certain records required to be maintained pursuant to Commission recordkeeping 

requirements. 

A sampling analysis, for example, of the personal devices of thirteen Wells Fargo 

employees, including four associated persons or principals of Wells Fargo’s FCM and/or swap 

dealer businesses, illustrates the breadth of Wells Fargo’s supervision and recordkeeping 

failures. Of those thirteen employees, which included senior-level employees, all had violated 

Wells Fargo’s communications policies and procedures by using personal text messages to 

communicate with coworkers and/or market participants. Further, those employees’ 

communications revealed that over one hundred other Wells Fargo employees (including 

numerous senior supervisors and associated persons) conducted firm business via unapproved 

methods (including in thousands of text messages). 

The Commission’s investigation concluded that certain of the communications by Wells 

Fargo employees using unapproved communication methods constituted records that were 

required to be kept pursuant to Commission recordkeeping requirements, but were not preserved 

and maintained by Wells Fargo. 
4 

Wells Fargo’s recordkeeping and supervision failures were firm-wide and involved 

employees at all levels of authority. Moreover, employees’ use of unapproved communication 

methods was not hidden within the firm. To the contrary, certain supervisors—the very people 

responsible for supervising employees to prevent this misconduct—routinely communicated 

using unapproved methods on their personal devices. In fact, managing directors and senior 

supervisors responsible for implementing Wells Fargo’s policies and procedures and for 

overseeing employees’ compliance with those policies and procedures themselves failed to 

comply with firm policies by communicating using unapproved methods on their personal 

devices about the firm’s Commission-regulated businesses. 

III. LEGAL DISCUSSION 

A. WFBNA’s Failure to Maintain Required Records in Violation of 

Sections 4s(f)(1)(C) and 4s(g)(1) and (3) of the Act and Regulations 23.201(a) 

and 23.202(a)(1) and (b)(1) 

Section 4s(f)(1)(C) of the Act obligates a swap dealer to keep “books and records of all 

activities related to its business as a swap dealer . . . in such form and manner and for such period 

as may be prescribed by the Commission by rule or regulation,” and those books and records 

must be kept “open to inspection and examination by any representative of the Commission.” 

7 U.S.C. § 6s(f)(1)(C); see also Section 4s(g)(1) and (3) of the Act, 7 U.S.C. § 6s(g)(1), (3) 

(requiring swap dealers to keep daily trading and counterparty records). These statutes are 

implemented, among other places, at Regulations 23.201(a) and 23.202(a)(1) and (b)(1), 

17 C.F.R. §§ 23.201(a), 23.202(a)(1), (b)(1) (2022). 

Regulation 23.201(a) obligates a swap dealer to “keep full, complete, and systematic 

records, together with all pertinent data and memoranda, of all its swaps activities,” including 

“[r]ecords of each transaction, including all documents on which transaction information is 

originally recorded.” Regulation 23.202(a)(1) and (b)(1) requires, in relevant part, every swap 

dealer to keep daily trading records of all swaps and related cash and forward transactions it 

executes, including, specifically, a record of oral and written communications provided or 

received concerning quotes, solicitations, bids, offers, instructions, trading, and prices that led to 

the execution of a swap transaction or the conclusion of a related cash or forward transaction. 

During the Relevant Period, as a result of the widespread employee use of unapproved 

communication methods, WFBNA failed to maintain Commission-required transaction records 

and pre-execution communications. By this conduct, WFBNA violated Sections 4s(f)(1)(C) and 

4s(g)(1) and (3) of the Act and Regulations 23.201(a) and 23.202(a)(1) and (b)(1). 

B. WFS’s Failure to Keep Required Records in Violation of Section 4g of the 

Act and Regulation 1.35 

Section 4g of the Act requires FCMs and other registrants to create and keep books and 

records pertaining to transactions and positions in such form and manner and for such period as 

may be required by the Commission. 7 U.S.C. § 6g. Regulation 1.35(a)(1), 17 C.F.R. 

§ 1.35(a)(1) (2022), sets forth some of the books and records that are required to be created and 

maintained by FCMs. Specifically, an FCM must: 
5 

(i) Keep full, complete, and systematic records . . . of all transactions relating to 

its business of dealing in commodity interests . . . , which shall include all orders 

(filled, unfilled, or canceled), . . . and all other records, which have been prepared 

in the course of its business of dealing in commodity interests . . . . 

*** 

(iii) Keep all oral and written communications provided or received concerning 

quotes, solicitations, bids, offers, instructions, trading, and prices that lead to the 

execution of a transaction in a commodity interest . . . , whether transmitted by 

telephone, voicemail, facsimile, instant messaging, chat rooms, electronic mail, 

mobile device, or other digital or electronic media . . . . 

With the exception of pre-trade communications, all such records are required to be “kept in a 

form and manner that allows for the identification of a particular transaction.” 

Regulation 1.35(a)(5), 17 C.F.R. § 1.35(a)(5) (2022). 

As a result of the widespread use of unapproved methods of communication by firm 

employees, which communications were not preserved and maintained, WFS failed to keep full, 

complete, and systematic records of all transactions relating to its business of dealing in 

commodity interests, in violation of Section 4g of the Act and Regulation 1.35.

C. WFBNA and WFS’s Failure to Keep Records in Required Manner in 

Violation of Regulation 1.31 

Regulation 1.31(b)(4), 17 C.F.R. § 1.31(b)(4) (2022), requires that registrants keep all 

books and records that are required to be maintained under the Act and Regulations in such 

manner as to make them “readily accessible” for a period of two years for paper records and for 

the duration of the retention period for electronic records. Upon request of the Commission, all 

of these documents are required to be “promptly” produced. Regulation 1.31(d), 17 C.F.R. 

§ 1.31(d) (2022). Regulation 23.203(b)(1), 17 C.F.R. § 23.203(b)(1) (2022), requires that 

records required to be kept pursuant to Part 23 of the Regulations be kept in accordance with 

Regulation 1.31, 17 C.F.R. § 1.31 (2022). 

By failing to keep all Commission-required records in such a manner as to make them 

“readily accessible,” Wells Fargo violated Regulation 1.31. 

D. WFBNA’s Failure to Supervise Diligently in Violation of Section 4s(h)(1)(B) 

of the Act and Regulation 23.602(a) 

Section 4s(h)(1)(B) of the Act, 7 U.S.C. § 6s(h)(1)(B), requires “diligent supervision of 

the business of the registered swap dealer[.]” Regulation 23.602(a) requires that each swap 

dealer “shall establish and maintain a system to supervise, and shall diligently supervise, all 

activities relating to its business performed by its partners, members, officers, employees, and 

agents (or persons occupying a similar status or performing a similar function).” 17 C.F.R. 

§ 23.602(a) (2022). The operative language of Regulation 23.602(a) is similar to the language of 
6 

the Commission’s longstanding supervision regulation for futures and options, Regulation 166.3, 

17 C.F.R. § 166.3 (2022). 

Under Regulation 23.602(a), “a violation is demonstrated by showing either that: (1) the 

registrant’s supervisory system was generally inadequate; or (2) the registrant failed to perform 

its supervisory duties diligently. In re JPMorgan Chase Bank, N.A., CFTC No. 22-07, 2021 WL 

6098347, at *6 (Dec. 17, 2021) (consent order); see also In re Commerzbank AG, CFTC No. 19-

03, 2018 WL 5921385, at *10–11 (Nov. 8, 2018) (consent order) (noting textual similarities 

between Regulation 23.602 and Regulation 166.3, applying case law concerning Regulation 

166.3, and citing In re Murlas Commodities, Inc., CFTC No. 85-29, 1995 WL 523563, at *9 

(Sept. 1, 1995), and In re Paragon Futures Ass’n, CFTC No. 88-18, 1992 WL 74261, at *14 

(Apr. 1, 1992)); In re INTL FCStone Mkts., LLC, CFTC No. 15-27, 2015 WL 4980321, at *3 

(Aug. 19, 2015) (consent order) (same). Either showing “alone is sufficient to establish a 

violation of the supervision requirement.” Commerzbank, 2018 WL 5921385, at *10 

(interpreting Regulation 23.602 in light of Regulation 166.3 precedents). No evidence of an 

underlying violation is necessary. In re Collins, CFTC No. 94-13, 1997 WL 761927, at *10 

(Dec. 10, 1997) (interpreting Regulation 166.3). Evidence of violations that “‘should be detected 

by a diligent system of supervision, either because of the nature of the violations or because the 

violations have occurred repeatedly,’ is probative of a failure to supervise.” See In re Bank of 

Nova Scotia, CFTC No. 20-26, 2020 WL 4926053, at *10 (Aug. 19, 2020) (consent order) 

(quoting In re Société Générale Int’l Ltd., CFTC No. 19-38, 2009 WL 4915485, at *7 (Sept. 30, 

2019) (consent order)). 

WFBNA failed to supervise its swap dealer business activities diligently during the 

Relevant Period. WFBNA failed to maintain an adequate supervisory system to ensure that 

employees did not utilize unapproved methods to engage in communications relating to firm 

business, including the swap dealer business. WFBNA’s failure to supervise is demonstrated by 

its failure to detect, prevent, and remediate repeated violations of the Commission’s 

recordkeeping requirements and firm policies and procedures. Supervisory personnel failed to 

ensure that employees complied with WFBNA’s Commission recordkeeping obligations and 

firm communications policies and in some instances themselves violated the policies. These 

supervision failures also resulted in the failure to keep and maintain Commission-required 

records and the failure to maintain the records in such a manner as to make them readily 

available. By this conduct, WFBNA failed to supervise diligently its officers, employees, and 

agents, in violation of Section 4s(h)(1)(B) of the Act and Regulation 23.602(a).

E. WFS’s Failure to Diligently Supervise in Violation of Regulation 166.3 

Regulation 166.3 states: 

Each Commission registrant, except an associated person who has no supervisory 

duties, must diligently supervise the handling by its partners, officers, employees 

and agents (or persons occupying a similar status or performing a similar 

function) of all commodity interest accounts carried, operated, advised or 

introduced by the registrant and all other activities of its partners, officers, 
7 

employees and agents (or persons occupying a similar status or performing a 

similar function) relating to its business as a Commission registrant. 

17 C.F.R. § 166.3 (2022). 

A violation under Regulation 166.3 is an independent violation for which no underlying 

violation is necessary. See Collins, 1997 WL 761927, at *10. A violation of Regulation 166.3 is 

demonstrated by showing either that: (1) the registrant’s supervisory system was generally 

inadequate; or (2) the registrant failed to perform its supervisory duties diligently. Murlas 

Commodities, Inc., 1995 WL 523563, at *9; Sansom Refining Co. v. Drexel Burnham Lambert, 

Inc., CFTC No. 82-R448, 1990 WL 282783, at *11 (Feb. 16, 1990) (noting that, under 

Regulation 166.3, registrants have “duty to develop procedures for the detection and deterrence 

of possible wrongdoing by [their] agents” (internal quotation omitted)); In re GNP Commodities, 

Inc., CFTC No. 89-1, 1992 WL 201158, at *17–19 (Aug. 11, 1992) (providing that, even if an 

adequate supervisory system is in place, Regulation 166.3 can still be violated if the supervisory 

system is not diligently administered); see also In re Rosenthal Collins Grp., LLC, CFTC 

No. 12-18, 2012 WL 1242406, at *6 (Apr. 12, 2012) (consent order) (respondent failed to 

perform supervisory duties diligently by not following its compliance procedures that were in 

place). Evidence of violations that “should be detected by a diligent system of supervision, 

either because of the nature of the violations or because the violations have occurred repeatedly” 

is probative of a failure to diligently supervise. Paragon Futures Ass’n, 1992 WL 74261, at *14 

(“The focus of any proceeding to determine whether Rule 166.3 has been violated will be on 

whether [a] review [has] occurred and, if it did, whether it was ‘diligent.’”). 

WFS failed to supervise its business as a Commission registrant by failing to maintain 

adequate supervisory systems to ensure that employees complied with WFS’s Commission 

recordkeeping requirements and firm policies and procedures that prohibited business-related 

communications on unapproved methods of communication. The inadequacy of WFS’s 

supervisory systems is demonstrated by the longstanding and repeated violations of WFS’s 

Commission recordkeeping obligations and firm policies and procedures and the fact that the 

supervisory failures resulted in the repeated failure to maintain Commission-required records, to 

ensure that the required records were readily accessible, and that the records could be promptly 

produced upon request. By this conduct, WFS failed to supervise diligently its officers, 

employees, and agents in violation of Regulation 166.3. 

IV. FINDINGS OF VIOLATIONS 

Based on the foregoing, the Commission finds that, during the Relevant Period, WFBNA 

violated Sections 4s(f)(1)(C), 4s(g)(1) and (3), and 4s(h)(1)(B) of the Act, 7 U.S.C. 

§§ 6s(f)(1)(C), 6s(g)(1), (3), 6s(h)(1)(B), and Regulations 1.31, 23.201(a), 23.202(a)(1) and 

(b)(1), and 23.602(a), 17 C.F.R. §§ 1.31, 23.201(a), 23.202(a)(1), (b)(1), 23.602(a) (2022); and 

WFS violated Section 4g of the Act, 7 U.S.C. § 6g, and Regulations 1.31, 1.35, and 166.3, 17 

C.F.R. §§ 1.31, 1.35, 166.3 (2022). 

V. OFFER OF SETTLEMENT 

Respondents have submitted the Offer in which they: 
8 

A. Acknowledge service of this Order; 

B. Admit the facts described in Section II above and acknowledge that their conduct 

violated the Act and Regulations; 

C. Admit the jurisdiction of the Commission with respect to all matters set forth in this 

Order and for any action or proceeding brought or authorized by the Commission based 

on violation of or enforcement of this Order; 

D. Waive: 

1. The filing and service of a complaint and notice of hearing; 

2. A hearing; 

3. All post-hearing procedures; 

4. Judicial review by any court; 

5. Any and all objections to the participation by any member of the Commission’s 

staff in the Commission’s consideration of the Offer; 

6. Any and all claims that they may possess under the Equal Access to Justice Act, 

5 U.S.C. § 504, and 28 U.S.C. § 2412, and/or the rules promulgated by the 

Commission in conformity therewith, Part 148 of the Regulations, 17 C.F.R. 

pt. 148 (2022), relating to, or arising from, this proceeding; 

7. Any and all claims that they may possess under the Small Business Regulatory 

Enforcement Fairness Act of 1996, Pub. L. No. 104-121, tit. II, §§ 201–253, 110 

Stat. 847, 857–74 (codified as amended at 28 U.S.C. § 2412 and in scattered 

sections of 5 U.S.C. and 15 U.S.C.), relating to, or arising from, this proceeding; 

and 

8. Any claims of Double Jeopardy based on the institution of this proceeding or the 

entry in this proceeding of any order imposing a civil monetary penalty or any 

other relief, including this Order; 

E. Stipulate that the record basis on which this Order is entered shall consist solely of the 

findings contained in this Order to which Respondents have consented in the Offer; 

F. Consent, solely on the basis of the Offer, to the Commission’s entry of this Order that: 

1. Makes findings by the Commission that WFBNA violated Sections 4s(f)(1)(C), 

4s(g)(1) and (3), and 4s(h)(1)(B) of the Act, 7 U.S.C. §§ 6s(f)(1)(C), 6s(g)(1), (3), 

6s(h)(1)(B), and Regulations 1.31, 23.201(a), 23.202(a)(1) and (b)(1), and 

23.602(a), 17 C.F.R. §§ 1.31, 23.201(a), 23.202(a)(1), (b)(1), 23.602(a) (2022); 

and WFS violated Section 4g of the Act, 7 U.S.C. § 6g, and Regulations 1.31, 

1.35, and 166.3, 17 C.F.R. §§ 1.31, 1.35, 166.3 (2022); 
9 

2. Orders WFBNA to cease and desist from violating Sections 4s(f)(1)(C), 4s(g)(1) 

and (3), and 4s(h)(1)(B) of the Act, and Regulations 1.31, 23.201(a), 23.202(a)(1) 

and (b)(1), and 23.602(a); and WFS to cease and desist from violating Section 4g 

of the Act and Regulations 1.31, 1.35, and 166.3; 

3. Orders Respondents to pay, jointly and severally, a civil monetary penalty in the 

amount of seventy-five million US dollars ($75,000,000), plus post-judgment 

interest within fourteen days of the date of entry of this Order; and 

4. Orders Respondents and their successors and assigns to comply with the conditions 

and undertakings consented to in the Offer and as set forth in Part VI of this Order; 

and 

G. Represent that Respondents have engaged in a review of certain recordkeeping failures 

and begun a program of remediation. 

Upon consideration, the Commission has determined to accept the Offer. 

VI. ORDER 

Accordingly, IT IS HEREBY ORDERED THAT: 

A. WFBNA and its successors and assigns shall cease and desist from violating 

Sections 4s(f)(1)(C), 4s(g)(1) and (3), and 4s(h)(1)(B) of the Act, 7 U.S.C. §§ 6s(f)(1)(C), 

6s(g)(1) and (3), 6s(h)(1)(B), and Regulations 1.31, 23.201(a), 23.202(a)(1) and (b)(1), 

and 23.602(a), 17 C.F.R. §§ 1.31, 23.201(a), 23.202(a)(1), (b)(1), 23.602(a) (2022); and 

WFS and its successors and assigns shall cease and desist from violating Section 4g of 

the Act, 7 U.S.C. § 6g, and Regulations 1.31, 1.35, and 166.3, 17 C.F.R. §§ 1.31, 1.35, 

166.3 (2022). 

B. Respondents shall pay, jointly and severally, a civil monetary penalty in the amount of 

seventy-five million US dollars ($75,000,000) (“CMP Obligation”), within fourteen days 

of the date of the entry of this Order. If the CMP Obligation is not paid in full within 

fourteen days of the date of entry of this Order, then post-judgment interest shall accrue 

on the CMP Obligation beginning on the date of entry of this Order and shall be 

determined by using the Treasury Bill rate prevailing on the date of entry of this Order 

pursuant to 28 U.S.C. § 1961. 

Respondents shall pay the CMP Obligation and any post-judgment interest by electronic 

funds transfer, U.S. postal money order, certified check, bank cashier’s check, or bank 

money order. If payment is to be made other than by electronic funds transfer, then the 

payment shall be made payable to the Commodity Futures Trading Commission and sent 

to the address below: 
10 

MMAC/ESC/AMK326 

Commodity Futures Trading Commission 

6500 S. MacArthur Blvd. 

HQ Room 266 

Oklahoma City, OK 73169 

9-AMC-AR-CFTC@faa.gov 

If payment is to be made by electronic funds transfer, Wells Fargo shall contact Tonia 

King or her successor at the above email address to receive payment instructions and 

shall fully comply with those instructions. Respondents shall accompany payment of the 

CMP Obligation with a cover letter that identifies the paying Respondent(s) and the name 

and docket number of this proceeding. The paying Respondent(s) shall simultaneously 

transmit copies of the cover letter and the form of payment to the Chief Financial Officer, 

Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW, 

Washington, D.C. 20581; 

C. Respondents and their successors and assigns shall comply with the following conditions 

and undertakings set forth in the Offer: 

1. Wells Fargo shall conduct, within 150 days of the entry of this Order: 

a. A comprehensive review of Wells Fargo’s supervisory, compliance, and other 

policies and procedures designed to ensure that Wells Fargo’s electronic 

communications, including those found on personal electronic devices, 

including without limitation, cellular phones (“Personal Devices”), are 

preserved in accordance with the requirements of the Act, the Regulations, 

and Wells Fargo’s policies and procedures. 

b. A comprehensive review of training conducted by Wells Fargo to ensure swap 

dealer and FCM personnel are complying with the requirements regarding the 

preservation of electronic communications, including those found on Personal 

Devices, in accordance with the requirements of the Act and the Regulations, 

and Wells Fargo’s policies and procedures, including by ensuring that Wells 

Fargo swap dealer and FCM personnel certify in writing on a quarterly basis 

that they are complying with preservation requirements. 

c. An assessment of the surveillance program measures implemented by Wells 

Fargo to ensure compliance, on an ongoing basis, with the requirements found 

in the Act, the Regulations, and Wells Fargo’s swap dealer and FCM policies 

and procedures to preserve electronic communications, including those found 

on Personal Devices. 

d. An assessment of the technological solutions that Wells Fargo has begun 

implementing to meet the record retention requirements of the Act, the 

Regulations, and Wells Fargo’s policies and procedures, including an 

assessment of the likelihood that Wells Fargo swap dealer and FCM personnel 

will use the technological solutions going forward and a review of the 
11 

measures employed by Wells Fargo to track employee usage of new 

technological solutions. 

e. An assessment of the measures used by Wells Fargo to prevent the use of 

unauthorized communications methods for business communications by swap 

dealer and FCM personnel. This assessment should include, but not be limited 

to, a review of the firm’s policies and procedures to ascertain if they provide 

for any significant technology and/or behavioral restrictions that help prevent 

the risk of the use of unapproved communications methods on Personal 

Devices (e.g., trading floor restrictions). 

f. A review of Wells Fargo’s electronic communications surveillance routines to 

ensure that electronic communications through approved communications 

methods found on Personal Devices are incorporated into Wells Fargo’s 

overall swap dealer and FCM communications surveillance program. 

g. A comprehensive review of the framework adopted by Wells Fargo to address 

instances of non-compliance by Wells Fargo swap dealer and FCM employees 

with Wells Fargo’s policies and procedures concerning the use of Personal 

Devices to communicate about Wells Fargo business in the past. This review 

shall include a survey of how Wells Fargo determined which employees failed 

to comply with Wells Fargo policies and procedures, the corrective action 

carried out, an evaluation of who violated policies and why, what penalties 

were imposed, and whether penalties were handed out consistently across 

business lines and seniority levels. 

2. Written Report of Findings: 

a. Within forty-five (45) days after completion of the review set forth in subparagraphs 1.a. through 1.g. above, Wells Fargo shall submit a detailed 

written report of its findings to the Commission staff (the “Report”). The 

Report shall include a description of the review performed, the names of the 

individuals who performed the review, the conclusions reached, and a 

summary of the plan for implementing the recommended changes in or 

improvements to Wells Fargo’s policies and procedures. 

b. Wells Fargo shall adopt all recommendations contained in the Report within 

one hundred and thirty-five (135) days of the date of the Report. 

c. The Report will likely include confidential financial, proprietary, competitive 

business or commercial information. Public disclosure of the reports could 

discourage cooperation, impede pending or potential government 

investigations or undermine the objectives of the reporting requirement. For 

these reasons, among others, the reports and the contents thereof are intended 

to remain and shall remain non-public, except: (1) pursuant to court order; 

(2) as agreed to by the parties in writing; (3) to the extent that the Commission 
12 

determines in its sole discretion that disclosure would be in furtherance of the 

Commission’s discharge of its duties and responsibilities; or (4) as otherwise 

required by law. 

3. One-Year Evaluation: Wells Fargo shall assess its program for the preservation, as 

required under the Act, Regulations, and Wells Fargo’s policies and procedures, of 

electronic communications, including those found on Personal Devices, commencing 

one year after submitting the Report required by Paragraph 2.a above. Wells Fargo 

shall require this review to evaluate Wells Fargo’s progress in the areas described in 

Paragraph 1.a. through 1.g. above. After this review, Wells Fargo shall submit a 

report (the “One Year Report”) to the Commission staff and shall ensure that the One 

Year Report includes an updated assessment of Wells Fargo’s policies and procedures 

with regard to the preservation of electronic communications (including those found 

on Personal Devices), training, surveillance programs, and technological solutions 

implemented in the prior year period. 

4. Reporting Discipline Imposed: For two years following the entry of this Order, Wells 

Fargo shall notify the Commission staff as follows upon the imposition of any 

discipline imposed by Wells Fargo, including, but not limited to, written warnings, 

loss of any pay, bonus, or incentive compensation, or the termination of employment, 

with respect to any swap dealer and FCM personnel found to have violated Wells 

Fargo’s policies and procedures concerning the preservation of electronic 

communications, including those found on Personal Devices: (1) at least 48 hours 

before the filing of a Form 8-T; or (2) within ten (10) days of the imposition of other 

discipline. 

5. Recordkeeping: Wells Fargo shall preserve, for a period of not less than six (6) years 

from the end of the fiscal year last used, the first two (2) years in an easily accessible 

place, any record of compliance with these undertakings. 

6. Public Statements: Respondents agree that neither they nor any of their successors 

and assigns, agents or employees under their authority or control shall take any action 

or make any public statement denying, directly or indirectly, any findings or 

conclusions in this Order or creating, or tending to create, the impression that this 

Order is without a factual basis; provided, however, that nothing in this provision 

shall affect Respondents’: (1) testimonial obligations; or (2) right to take legal 

positions in other proceedings to which the Commission is not a party. Respondents 

and their successors and assigns shall comply with this agreement, and shall 

undertake all steps necessary to ensure that all of their agents and/or employees under 

their authority or control understand and comply with this agreement. 

7. Cooperation, in General: Respondents shall cooperate fully and expeditiously with 

the Commission, including the Commission’s Division of Enforcement, in this action, 

and in any current or future Commission investigation or action related thereto. 

Respondents shall also cooperate in any investigation, civil litigation, or 

administrative matter related to, or arising from, the subject matter of this action.