Blog Posts Tagged With CFTC

In re R.J. O’Brien & Associates, LLC (July 30, 2018, Settled)

Action against Respondent, a registered Futures Commission Merchant, in connection with alleged failure to supervise a client’s alleged misallocation of executed bunched orders.  The CFTC alleges that, despite various red flags, Respondent failed to monitor its client’s use of Respondent’s trading platform to execute bunched orders and improperly allocated the bunched orders post-execution.  Respondent has agreed to pay a civil penalty in the amount of $600,000.

CFTC Order

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CFTC v. JAFX, Ltd. (July 27, 2018, Contested)

Action against Defendant, an unregistered retail foreign exchange dealer, in connection with alleged failure to register as a forex dealer.  The CFTC alleges that Defendant failed to register as a retail forex dealer as required and did not provide U.S. customers with Risk Disclosure Statements as required.

CFTC Complaint

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In re Lansing Trade Group, LLC (July 12, 2018, Settled)

Action against Respondent, a commodities trading firm, in connection with alleged commodities price manipulation schemes.  The CFTC alleges that Respondent placed and then cancelled a number of “wheat shipping certificates,” to manipulate the appearance of market demand for wheat.  The CFTC further alleges the Respondent also attempted to drive the price of yellow corn by entering into below-market transactions with a counterparty.  Respondent has agreed to pay a $3,400,000 civil penalty.

CFTC Order

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CFTC v. Harris Bruce Landgarten (July 2, 2018, Contested)

Action against Defendant, a commodity pool operator, in connection with alleged misappropriation of pool funds.  The CFTC alleges that Defendant would unilaterally, and without disclosure to investors, withdraw pool funds to reimburse Defendant‘s undocumented expenses.  The CFTC further alleges that Defendant made material misrepresentations regarding the value of pool funds to investors.

CFTC Complaint

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In re JP Morgan Chase Bank (A.P. June 18, 2018, Settled)

Action against Respondent, a bank and registered swap dealer, in connection with an alleged scheme to manipulate the ISDAFIX benchmark.  The CFTC alleges that Respondent entered false submissions that Respondent knew it would not honor and engaged in manipulative trading in targeted interest rate products to benefit its derivatives positions.  The CFTC further alleges that Defendants clustered these false submissions and trades around ISDAFIX’s fixing time in an effort to manipulate the benchmark.  Respondent agreed ... Continue Reading

CFTC v. Omega Knight 2, LLC, et al. (S.D. Fla. June 13, 2018, Contested)

Action against Defendants, a purported precious metals retailer and its employees, in connection with an alleged scheme to defraud retail customers.  The CFTC alleges that Defendants fraudulently induced customers into investing at least $5.5 million in precious metals transactions, but failed to use all the funds they collected in support of such transactions.  The CFTC further alleges that Defendants wired the proceeds of these transactions to the employees’ accounts for personal use.

CFTC Complaint

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CFTC v. Mark Olsen Mining Co., et al. (S.D. Fla. June 12, 2018, Contested)

Action against Defendants, a purported precious metals retailer and its employee, in connection with an alleged scheme to defraud retail customers.  The CFTC alleges that Defendants received payments amounting to at least $870,000 for precious metals, but never delivered the underlying assets.  The CFTC further alleges that Defendants wired the proceeds of these transactions to employees’ accounts for personal use.

CFTC Complaint

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In re Société Générale S.A. (A.P. June 4, 2018, Settled)

Action against Respondent, a bank and registered swap dealer, in connection with alleged manipulation of and material misrepresentations regarding international interest rates, including LIBOR.  The CFTC alleges that Respondent’s traders made benchmark submissions based on impermissible factors in an effort to protect its reputation from speculation that it was having difficulty borrowing unsecured funds and to manipulate the setting of benchmarks and benefit its trading positions.  The CFTC further alleges that, even after Respondent became ... Continue Reading

CFTC v. X-Change Financial Access LLC (C.D. Cal. May 29, 2018, Settled)

Action against Defendant, a commodity pool operator, for alleged failure to supervise its employees’ handling of customer accounts and failure to preserve complete records.  According to the CFTC, Defendant failed to maintain written policies or procedures concerning the post-execution allocation of bunched orders and did not train its staff regarding their obligations related to the handling of bunched orders.  The CFTC further alleges that Defendant’s policies and procedures regarding compliance with regulatory actions were insufficient ... Continue Reading

CFTC v. Jin Choi, et al. (C.D. Cal. May 24, 2018, Contested)

Action against Defendant, an unregistered commodity trading advisor, for allegedly making material misstatements regarding his experience, registration status, and use of client funds and for failing to register.  According to the CFTC, Defendant falsely stated that he had trading experience and was registered as an adviser during solicitations to FOREX investors and misappropriated investor funds for personal expenses.

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CFTC v. Glencore Agriculture B.V., et al. (A.P. Apr. 30, 2018, Settled)

Action against Respondents, two companies that originate agriculture commodities, for allegedly holding net positions in the ICE Futures Cotton No. 2 contracts that, in aggregate, exceeded the CFTC’s speculative position limits.  The CFTC further alleges that Respondents executed exchange of futures for physical transactions opposite each other’s cotton futures trading accounts, even though their accounts were not independently controlled.  Finally, the CFTC alleges that one Defendant submitted a Form 304 that failed to represent all ... Continue Reading

CFTC v. Charles H. McAllister (W.D. Tex. Apr. 26, 2018, Contested)

Action against Defendant for alleged fraud and misappropriation in connection with contracts of sale of precious metals through his company.  According to the CFTC, Defendant and his company fraudulently solicited customers to send money to his company for the purchase of precious metals, but failed to procure all the metal promised, instead misappropriating funds to cover business expenses, invest in other businesses, and make Ponzi-like payments to earlier customers.  The CFTC further alleges that Defendant ... Continue Reading

CFTC v. Michael J. Salerno, et al. (E.D. Pa. Apr. 25, 2018, Contested)

Action against Defendants, an individual and his companies, in connection with an alleged fraudulent hiring process, fraudulent misrepresentations, and misuse of trader funds.  According to the CFTC, Defendants fraudulently solicited individuals to become forex traders by making false statements on online employment-related websites that Defendants required traders to pay a “risk deposit” and that Defendants would match the deposits with company funds in proprietary trading accounts and share a portion of the profits from trading ... Continue Reading

CFTC v. Blake Harrison Kantor aka Bill Gordon, et al. (E.D.N.Y. Apr. 17, 2018, Contested)

Action against Defendants, two individuals and four entities, in connection with alleged unregistered binary options transactions.  According to the CFTC, Defendants solicited potential customers by falsely claiming that customers’ accounts would yield profits based on purported past profitable trading by one of the Defendants.  The CFTC further alleges that Defendants misappropriated customer funds for their personal use and sought to conceal their misappropriation by inviting customers to transfer their binary options account balances into a ... Continue Reading

CFTC v. R2 Capital Group, LLC, et al. (A.P. Apr. 11, 2018, Contested)

Action against Defendants, an individual and his holding company, for alleged fraudulent solicitation from several pool participants for an investment pool operated by Defendants.  According to the CFTC, Defendants misappropriated pool funds by diverting sums from holding company and pool bank accounts to themselves and their holding companies, and using funds for personal expenses.  In a default judgment, the court ordered Defendants to pay, jointly and severally, $1,381,454.43 in restitution and a civil penalty in ... Continue Reading

CFTC v. The Kane Capital Investment Group, LLC, & Amrit Jaswant Singh Chahal (E.D. Va. Apr. 11, 2018, Contested)

Action against Defendants, a commodity investment company and its principal, for allegedly making misleading statements to investors and misappropriating investor funds.  According to the CFTC, Defendants made erroneous statements to potential investors regarding their profitability and used investor funds to pay for personal expenses.

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CFTC v. Algointeractive, Inc., et al. (S.D.N.Y. Apr. 11, 2018, Contested)

Action against Defendants, a commodity investment company and its two principals, for allegedly making misleading statements to potential investors in pooled investment vehicles for futures trading.  According to the CFTC, Defendants misappropriated participants’ funds, issued false statements to conceal losses, and failed to register with the CFTC.  A related criminal action has been filed.

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CFTC v. Anuj C. Singhal (Apr. 9, 2018, Settled)

Action against Respondent, a registered floor broker, for alleged spoofing in the agricultural commodity futures market.  According to the CFTC, Respondent’s practice was to enter larger limit orders on one side of the CME wheat futures market, sometimes with several larger orders in succession, and then enter a smaller market order on the opposite side of the market.  Respondent has agreed to pay a civil penalty in the amount of $150,000.

CFTC Order

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CFTC v. Ron Olen Friedrichsen (S.D.N.Y. Mar. 2, 2018, Contested)

Action against Defendant, a purported commodity trading advisor, for allegedly soliciting clients under false names and without properly registering with the CFTC. The CFTC alleges that Defendant solicited clients via Craigslist ads, telephone, and email, while making false and misleading statements concerning his trading successes and guaranteed profits.

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In re AMP Global Clearing LLC (A.P. Feb. 12, 2018, Settled)

Action against Respondent, a registered Futures Commission Merchant, for alleged failure to supervise the implementation of critical provisions of its information systems security program. According to the CFTC, this failure left customer records and information vulnerable and allowed third party access to files including customer personally identifiable information. Respondent has agreed to pay a civil penalty of $100,000, and to an undertaking requiring follow-up reports related to its cybersecurity efforts.

CFTC Press Release

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SEC and CFTC Chairs Testify on Virtual Currency Oversight (Feb. 6, 2018)

SEC Chairman Jay Clayton and CFTC Chairman Christopher Giancarlo testified before the Senate Banking, Housing and Urban Affairs Committee on regulatory and enforcement efforts in connection with Bitcoin and other virtual currencies.  Both officials suggested that a broader, coordinated effort to monitor and regulate these currencies was necessary.  Chairman Giancarlo stated:  “It strikes me that we owe it to this new generation to respect their enthusiasm about virtual currencies with a thoughtful and balanced response, ... Continue Reading

In re Deutsche Bank Securities, Inc. (A.P. Feb. 1, 2018, Settled)

Action against Respondent for an alleged attempt to manipulate the U.S. Dollar International Swaps and Derivatives Association Fix benchmark (ISDAFIX).  The CFTC alleges that Respondent’s traders attempted to manipulate the benchmark by strategically bidding, offering, and executing transactions in targeted interest rate products at or near the rate fixing time.  The CFTC further alleges that Respondent’s traders attempted to manipulate the final published rate by submitting false rates.  Respondent has agreed to pay a civil ... Continue Reading

In re Deutsche Bank AG, et al. (A.P. Jan. 29, 2018, Settled)

Action against Respondent for allegedly attempting to manipulate the price of precious metals futures contracts using manual spoofing techniques and trading for the purpose of triggering customer stop-loss orders. The CFTC alleges that traders on Defendant’s precious metals desk, acting in a coordinated manner, placed spoof orders and exchanged messages soliciting others to engage in spoofing and regarding their successes in manipulating the markets. The CFTC further alleges that Defendant failed to adequately supervise its ... Continue Reading

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