CFTC says court entered consent order against swaps trader John Patrick Gorman III
The CFTC said the consent order requires a $90,000 penalty and resolves allegations that Gorman made false or misleading statements and deleted messages tied to a preservation request.
The Commodity Futures Trading Commission said a federal court entered a consent order against John Patrick Gorman III over alleged false statements during an agency investigation.
The CFTC said the U.S. District Court for the Southern District of New York entered the order, which requires Gorman to pay a $90,000 civil monetary penalty. The commission identified him as a U.S. dollar swaps trader and managing director of a global investment bank.
The agency said the case involved false or misleading statements during an enforcement inquiry and the deletion of messages covered by a preservation request. According to the CFTC, those steps affected materials it said were relevant to its review of trading by Gorman and his employer.
In its press release, the CFTC said Division of Enforcement staff sent Gorman a preservation request in March 2019. The request related to an investigation into trading by him and his employer. The agency said that after learning of the request, he deleted messages covered by it, including WhatsApp messages.
The CFTC also said it sent a subpoena for certain categories of documents, including WhatsApp messages. When Gorman’s personal phone was imaged in response to the subpoena, the agency said numerous responsive WhatsApp messages were no longer on it.
The order also says Gorman deleted a single text message from a conversation with a colleague that was relevant and material to the investigation. In May 2019, the CFTC said, he submitted a letter stating he had not destroyed or altered any documents covered by the preservation request. The order says that statement was false.
The commission said Gorman also made false and misleading statements during CFTC testimony in November 2019 about compliance with the preservation request and about communications with bank employees who were not on the swaps desk. The order says the statements were material because they could influence a Commission decision or hinder its investigation.
CFTC Division of Enforcement Director David I. Miller said the division has zero tolerance for false statements made during investigations.
The consent order permanently enjoins Gorman from violating the cited provision of the Commodity Exchange Act, according to the CFTC. The order also dismisses with prejudice counts I and II of the CFTC complaint filed on Feb. 1, 2021.
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