Blog Posts Tagged With CFTC

CFTC and UK Authorities Issue Joint Statement on Continuity of Derivatives Trading and Clearing Post-Brexit (Feb. 25, 2019)

The CFTC and the Bank of England, including the Prudential Regulation Authority and the Financial Conduct Authority, issued a joint statement assuring the market that derivative trading and clearing activities will continue between the U.K. and U.S. after the U.K.’s withdrawal from the EU. The statement sets out a list of measures to ensure regulatory and financial stability, including continued supervisory cooperation, extension of existing CFTC relief and comparability for the U.K., and U.K. equivalence
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CFTC v. The Tulving Company, Inc. and Hannes Tulving, Jr. (W.D.N.C. Nov. 29, 2018, Consent Order)

The U.S. District Court for the Western District of North Carolina entered a supplemental consent order against Defendants, an individual and his precious metals company, for alleged fraudulent solicitation of customers for precious metals transactions, misappropriation of customer funds, and false statements about purported transactions.  The Court’s supplemental order requires Defendants to pay, jointly and severally, a civil penalty of $15,761,432.  The supplemental consent order followed the Court’s consent order of permanent injunction and its
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CFTC v. Pishon Holdings, LLC, et al. (W.D. Wash. Dec. 27, 2018, Default Judgment Order)

Action against Defendants, a husband, wife, and their futures trading company, for alleged misappropriation and fraud.  According to the CFTC, Defendants solicited investor funds based on misrepresentations about the amount of money they managed, prior investment success, the structure of trading fees, and Defendant husband’s prior fraud conviction.  The CFTC also alleges that Defendants misappropriated investor funds for personal expenses.  The court entered a default judgment requiring Defendants to pay, jointly and severally, restitution of
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CFTC v. Andre Flotron (D. Conn. Feb. 5, 2019, Consent Order)

The U.S. District Court for the District of Connecticut entered a final judgment and consent order against Defendant, a former precious metals trader, for alleged spoofing.  According to the CFTC, Defendant placed futures orders with the intent to cancel the orders before execution in order to manipulate prices.  Defendant has agreed to pay a civil penalty of $100,000 and post-judgment interest.

Judgment

CFTC Press Release

Previous Coverage
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SEC and CFTC Enforcement Slow During Government Shutdown (Jan. 26, 2019)

The federal government was shut down from December 22, 2018, through January 25, 2019.  SEC and CFTC enforcement activity fell off sharply during that period.  In January of 2019, the SEC announced four enforcement actions, compared to 10 in January of last year.  On the administrative side, the SEC announced two enforcement actions this month, compared to 23 in January of last year.  The CFTC issued one enforcement-related press release in January, compared to 13
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CFTC v. Kelvin Oscar Ramirez (S.D. Tex. Jan. 14, 2019, Contested)

Action against Defendant, a self-professed forex trader and investment manager, for alleged fraud and failure to register as a commodity pool operator and commodity trading advisor.  According to the CFTC, Defendant fraudulently solicited investments in forex pools by making exaggerated claims about his investing success and other misrepresentations, primarily via social media.  The CFTC further alleges that Defendant misappropriated nearly all of the funds that he raised for personal use.  The Court entered a preliminary
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In re Newport Private Capital LLC and Jonathan Hansen (A.P. Dec. 21, 2018, Settled)

Action against Respondents, a commodity trading firm and its principal, for an alleged cherry-picking scheme.  According to the CFTC, Respondents executed intraday commodities trades in order to allocate profitable trades to themselves and non-profitable trades to customers and also kept inadequate records.  Respondents have agreed to pay, jointly and severally, a civil penalty of $315,000 and post-judgment interest and to permanent commodity interest trading and CFTC registration bans.

CFTC Press Release 

CFTC Order
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CFTC v. Michael S. Wright and Wright Time Capital Group LLC (d/b/a Global FX Club) (S.D.N.Y. Dec. 7, 2018, Default Judgment Order)

Action against Defendants, a commodity pool and its CEO, for alleged fraud.  According to the CFTC, Defendants fraudulently solicited investments, made false representations to investors, misappropriated funds, falsified account statements, and commingled pool funds, among other violations.  The court has entered a default judgment against Defendant company that orders restitution of $371,250, a civil penalty of $1,113,750, post-judgment interest, and permanent trading and registration bans.  A consent order was previously entered as to Defendant CEO,
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CFTC v. Haena Park, et al. (S.D.N.Y. Dec. 3, 2018, Settled)

Action against Defendants, two individuals and their companies, for alleged fraud on investors related to trading in foreign currencies and futures contracts.  According to the CFTC, Defendants misrepresented their trading expertise and track record, provided investors with false documents, and made false statements to the National Futures Association, among other violations.  Defendants have agreed to pay restitution totaling $22,917,551, civil penalties totaling $175,000, and post-judgment interest.  One individual Defendant has agreed to a five-year trading
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CFTC v. Dro Kholamian and Blue Star Trading LLC (N.D. Ill. Nov. 30, 2018, Contested)

Action against Defendants, a commodity trading advisor and its principal, for alleged fraud on investors and failure to register with the CFTC.  According to the CFTC, Defendants misrepresented the prospect of high returns in order to solicit investor funds for trading in off-exchange foreign currency and commodity future contracts, which Defendants then misappropriated.  Defendants have agreed to a consent order for a preliminary injunction, but the case remains contested.

CFTC Press Release 

CFTC Complaint
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CFTC v. Lon Olen Friedrichsen (S.D.N.Y. Nov. 26, 2018, Contested)

Action against Defendant, an unregistered commodity trading advisor, for alleged fraud related to futures contracts.  According to the CFTC, Defendant misrepresented his experience and success in order to induce investors to grant him access to their futures trading accounts.  The CFTC alleges that Defendant’s trading resulted in large losses to these accounts.  The court has entered a default judgment requiring Defendant to pay $591,570 in restitution, a civil penalty of $1,500,000, and post-judgment interest and
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CFTC Releases Annual Enforcement Results for Fiscal Year 2018 (Nov. 15, 2018)

The CFTC’s Division of Enforcement released its annual report reviewing enforcement actions from the 2018 fiscal year. According to the report, the Commission brought 83 enforcement actions and obtained more than $950 million in monetary sanctions.  The report noted key initiatives that began or continued during fiscal year 2018, including cooperation and self-reporting, data analytics, and the development of specialized task forces focused on four different substantive areas:  (1) spoofing and manipulative trading, (2) virtual
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CFTC v. Algointeractive Inc., et al. (S.D.N.Y. Nov. 13, 2018, Consent Order)

Action against Defendants, a hedge fund and its two principals, for alleged fraudulent solicitations and misappropriation of investor funds. According to the CFTC, Defendants misrepresented to investors their level of experience and plans to invest funds in futures contracts. The CFTC alleges that Defendants instead used investor funds for their personal benefit and concealed losses in communications to investors. The CFTC also alleges that Defendants failed to register their commodity pool. One Defendant principal has
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SEC v. Gaylen D. Rust and Rust Rare Coin, Inc. (D. Utah Nov. 15, 2018, Contested) and CFTC and Utah Division of Securities v. Rust Rare Coin Inc. and Gaylen Dean Rust (D. Utah Nov. 13, 2018, Contested)

Actions against Defendants, a trader and a rare coin company, for an alleged fraudulent investment scheme. According to the SEC and CFTC, Defendants misled investors by making false statements about a silver trading program. The SEC and CFTC allege that Defendants used investor funds to make Ponzi-like payments to earlier investors and to pay for Defendant trader’s personal and business expenses.

SEC Litigation Release

SEC Complaint 

CFTC Press Release 

CFTC Complaint
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CFTC v. Richard D. Carter, et al. (N.D. Ill. Nov. 13, 2018, Partially Settled, Partially Contested)

Action against Defendants, a corporation and its two principals, for alleged fraudulent solicitation and misappropriation of investor funds related to the operation of a commodity pool fraud.  According to the CFTC, Defendants failed to register with the CFTC and made material misrepresentations to pool participants about the pool’s success and prospective profits.  One Defendant principal has agreed to a five-year industry bar and to pay $280,000 in restitution, $45,342.44 in disgorgement, a civil penalty of
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In re Commerzbank AG (A.P. Nov. 8, 2018, Settled)

Action against Respondent, a banking and financial services company, for alleged violations of the Commodity Exchange Act and CFTC regulations. According to the CFTC, Respondent failed to supervise the activities of its swap dealers and made material misstatements and omissions to the CFTC about operations and regulatory compliance for these dealers. Respondent has agreed to pay a $12 million civil penalty and has also agreed to remediation and monitoring measures.

CFTC Press Release

CFTC Order
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