Blog Posts Tagged With CFTC

In re XBT Corp. SARL d/b/a First Global Credit (A.P. Oct. 31, 2019, Settled)

Actions against Respondent, an operator of a digital-currency trading platform, for alleged registration failures.  According to the SEC and CFTC, Respondent solicited and accepted futures orders from customers, accepted Bitcoin as collateral margin for customers’ trades, and sold security-based swaps without registering with either agency.  Respondent has agreed to pay a civil penalty of $100,000 to the CFTC.  Respondent has agreed to pay disgorgement and prejudgment interest of $131,952 and a civil monetary penalty of
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In re Upstream Energy Services LLC (A.P. Oct. 24, 2019, Settled)

Action against Respondent, an energy company, for alleged registration failure. According to the CFTC, Respondent accepted orders from two clients, traded natural gas commodity futures and options based on those orders, and received fees for those orders without registering with the CFTC as a futures commission merchant.  Respondent has agreed to pay a civil penalty of $75,000.

CFTC Order 

CFTC Press Release
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In re David Sechovicz (A.P. Oct. 7, 2019, Settled); CFTC v. Peter Szatmari (D. Haw., Oct. 7, 2019 Contested)

Actions against Respondent and Defendant, internet marketers for unregistered binary option brokers, for alleged fraud. According to the CFTC, Respondent and Defendant created fictitious websites, news stories, and testimonials to promote binary option trading brokers and were compensated with referral fees from brokers.  Respondent has agreed to pay a civil penalty of $949,918.50.

CFTC Order

CFTC Complaint

CFTC Press Release

Previous Coverage
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In re Hard Eight Futures, LLC (A.P. Sept. 30, 2019, Settled); In re Igor Chernomzav (Sept. 30, 2019, Settled)

Actions against Respondents, a trading firm and its principal, for alleged spoofing.  According to the CFTC, Respondents placed orders for E-mini futures contracts with the intent to cancel them before execution to manipulate prices.  Respondent trading firm has agreed to pay a civil penalty of $1,750,000.  Respondent principal has agreed to pay a civil penalty of $750,000 and to a nine-month trading bar.

CFTC Press Release

CFTC Order (Hard Eight)

CFTC Order (Chernomzav)
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CFTC v. Jon Barry Thompson (S.D.N.Y. Sept. 30, 2019, Contested)

Action against Defendant, the principal of a Bitcoin escrow company, for alleged fraud. According to the CFTC, Defendant induced customers to send him funds for the purchase of Bitcoin based on false representations that he already had the Bitcoin in hand.  The CFTC further alleges that Defendant misappropriated the customers’ funds and failed to deliver the promised Bitcoin.

CFTC Press Release

CFTC Complaint
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In re HSBC Bank USA, N.A. (A.P. Sept. 30, 2019, Settled); In re Société Générale International Limited (A.P. Sept. 30, 2019, Settled); In re The Northern Trust Company (A.P. Sept. 30, 2019, Settled); In re NatWest Markets Plc (A.P. Sept. 30, 2019, Settled); In re The Bank of New York Mellon (A.P. Sept. 30, 2019, Settled); In re PNC Bank, National Association (A.P. Sept. 30, 2019, Settled)

Actions against Respondents, registered swap dealers, for alleged failures to report data in connection with swap trades.  According to the CFTC, Respondents’ reporting failures varied, but include, for example, failure to report life-cycle events, primary economic terms, and collateralization indicators.  Respondents have agreed to pay respective civil penalties of $650,000, $2,500,000, $1,000,000, $850,000, $750,000, and $300,000.

CFTC Order (HSBC)

CFTC Order (Société Générale)

CFTC Order (Northern Trust)   

CFTC Order (NatWest)

CFTC Order (New York Mellon)
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In re RBC Capital Markets (A.P. Sept. 30, 2019, Settled)

Action against Respondent, a registered futures commission merchant, for alleged failures to supervise.  According to the CFTC, Respondent’s employees were able to execute wash trades due to Respondent’s inadequate supervisory controls.  Respondent has agreed to pay a civil penalty of $5,000,000.

CFTC Order

CFTC Press Release

 
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In re BGC Financial, LP (A.P. Sept. 30, 2019, Settled); In re GFI Securities, LLC (A.P. Sept. 30, 2019, Settled)

Actions against Respondents, interdealer brokers, for alleged fraud.  According to the CFTC, Respondents made false representations to clients about whether certain prices were executable and whether certain trades had already occurred to create the perception of greater liquidity and tighter spreads in foreign exchange options.  One Respondent has agreed to pay a civil penalty of $15,000,000.  Another Respondent has agreed to pay a civil penalty of $10,000,000.

CFTC Order (BGC)

CFTC Order (GFI)

CFTC Press
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In re Classic Energy LLC and Mathew D. Webb (A.P. Sept. 30, 2019, Settled)

Action against Respondents, a trader and his employer, for alleged misuse of order information, failure to supervise, and recordkeeping violations. According to the CFTC, Respondent trader misused order information to take the other side of customer trades, rather than matching the orders to those of other market participants as the customers expected.  Respondents have agreed to pay, jointly and severally, a civil penalty of $1,500,000. Respondent trader has agreed to pay disgorgement of $413,065.

CFTC
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In re Coby Tresner (A.P. Sept. 30, 2019, Settled)

Action against Respondent, a commodities floor broker, for alleged unauthorized trading and misappropriation.  According to the CFTC, Respondent falsely represented to clients that he was a registered commodity trading adviser and associated person of a registered introducing broker.  The CFTC further alleges that Respondent misappropriated client funds to pay personal expenses.  Respondent has agreed to pay a civil penalty of $250,000, restitution of $55,000, and post-judgment interest, and to permanent trading and registration bars.

CFTC
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In re Intergrain (A.P. Sept. 30, 2019, Settled)

Action against Respondent, a Luxembourg-based agribusiness, for alleged failure to comply with Regulation 19.01, which requires disclosure when a legal person holds certain agricultural futures in a hedging position.  According to the CFTC, Respondents held or controlled soybean futures that were hedging positions but failed to file the necessary disclosure forms.  Respondent has agreed to pay a civil penalty of $175,000.

CFTC Order

CFTC Press Release
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CFTC v. David Gilbert Saffron a/k/a/ David Gilbert and Circle Society, Corp. (D. Nev. Sept. 30, 2019, Contested)

Action against Defendants, a binary options trading company and its owner, for alleged fraud.  According to the CFTC, Defendants solicited investor funds for use in forex and cryptocurrency trading based on false claims about Defendant owner’s trading expertise and false guarantees of high returns.  The CFTC further alleges that Defendants use investor funds to make Ponzi-like payments to earlier investors.

CFTC Complaint 

CFTC Press Release
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In re Morgan Stanley Capital Group, Inc. (A.P. Sept. 30, 2019, Settled); In re Belvedere Trading, LLC (A.P. Sept. 30, 2019, Settled); In re Mitsubishi International Corporation (A.P. Sept. 30, 2019, Settled)

Actions against Respondents, two trading firms and a bank, for alleged spoofing.  According to the CFTC, Respondents entered trades with the intent to cancel them before execution to manipulate prices.  Respondents have agreed to pay respective civil penalties of $1,500,000, $1,100,000, and $400,000.

CFTC Order (Morgan Stanley)

CFTC Order (Belvedere)

CFTC Order (Mitsubishi)

CFTC Press Release
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In re Liora Welles (A.P. Sept. 30, 2019, Settled); In re Yair Hadar (A.P. Sept. 30, 2019, Settled); In re Shira Uzan (A.P. Sept. 30, 2019, Settled)

Actions against Respondents, three retention agents for an Israel-based binary-options firm, for allegedly soliciting customers to enter into illegal and off-exchange binary option transactions.  According to the CFTC, Respondents misrepresented the nature of the binary option trades they offered and falsely stated that most customers’ trades were profitable when in fact most customers lost money.  Respondents have entered into cooperation agreements with the CFTC and have agreed to permanent trading and registration bars.  Respondents have
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In re Rafael Novales (A.P. Sept. 30, 2019, Settled)

Action against Respondent, a registered introducing broker, for alleged false statements to a regulator. According to the CFTC, Respondent submitted to an interview in connection with a CFTC investigation, during which he falsely stated that he always spoke with customers and obtained their authorization before executing orders on their behalf.  Respondent has agreed to pay a $50,000 civil monetary penalty and to a five-year registration bar.

CFTC Order

CFTC Press Release
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CFTC v. Tate Street Trading, Inc., and Leonard J. Cipolla (E.D. Va. Sept. 19, 2019, Contested)

Action against Defendants, a commodity-trading corporation and its owner, for misappropriation and fraud.  According to the CFTC, Defendants solicited funds for a futures and options trading pool and used the proceeds to make Ponzi-like payments to earlier investors and to pay personal expenses.

CFTC Complaint

CFTC Press Release
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CFTC v. Jared J. Davis (N.D. Ohio Sept. 17, 2019, Contested)

Action against Defendant, owner of a binary options trading company, for alleged fraud. According to the CFTC, Defendant solicited customers for trades in binary options on commodities and foreign currencies while trading against customer positions and utilizing the trading platform to favor his trades over those of his customers.

CFTC Complaint

CFTC Press Release
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In re John Lawrence (A.P. Sept. 16, 2019, Settled); In re Heraeus Metals New York LLC (A.P. Sept. 16, 2019, Settled)

Actions against Respondents, a commodities trader and his employer, for alleged spoofing. According to the CFTC, Respondent placed orders for precious metals futures contracts with the intent to cancel them before execution to manipulate prices and encourage execution of orders Respondent wanted filled. Respondent trader has agreed to a four-month trading bar and to pay a $130,000 civil monetary penalty, and Respondent employer has agreed to pay a $900,000 civil monetary penalty.

CFTC Order (Trader)
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In re Christian Trunz (A.P. Sept. 16, 2019, Settled)

Action against Respondent, a precious metals trader, for alleged spoofing. According to the CFTC, Respondent placed orders for precious metals futures contracts with the intent to cancel them before execution to manipulate prices.  The CFTC has reserved decision on sanctions against Respondent pending fulfillment of his cooperation agreement with the CFTC. Respondent previously pleaded guilty in a parallel criminal action in the Eastern District of New York.

CFTC Order

CFTC Press Release
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