Commodities Exchange Act Fraud

The Commodity Futures Trading Commission (CFTC) enforces and levies fines for violations of the Commodities Exhange Act. The CFTC has enforcement authority over individuals and firms registered with the Commission, those who are engaged in commodity futures and option trading on designated domestic exchanges, and those who improperly market futures and options contracts.

Recent CFTC enforcement actions have resulted in penalties for:

  • Fraudulent solicitation of investors through false statements and misrepresentations
  • Misappropriation of investments, for example as part of a Ponzi scheme
  • Manipulation of foreign currency benchmark rates, inter-bank interest rates, or credit default swaps
  • Engaging in illegal, off-exchange transactions in precious metals
  • Undercapitalization and failure to report the same to the CFTC
  • Operating illicit commodities pools, i.e. failing to register with the CFTC as a Commodity Pool Operator and/or Commodity Trading Advisor
  • Failure to comply with disclosure, recordkeeping, or reporting requirements

Notable enforcement actions are compiled here.

The CFTC rewards whistleblowers who bring violations of the Commodities Exchange Act to the agency’s attention, where the whistleblower’s information results in a successful enforcement action with penalties in excess of $1 million.

To find out more about whether a particular type of fraud is covered by the CEA and if you should submit information through CFTC Whistleblower Program, contact us today.