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December 20, 2023

Avinash Singh and Highrise Advantage, LLC will pay over $100 million in restitution and civil penalties and are permanently banned from registering with the CFTC and from trading on any registered entity. Despite bringing in almost $58 million from investors and feeder funds, Singh and Highrise used less than $2.5 million on forex trades and used over $25 million on personal expenses and to make payments on their Ponzi-like scheme. CFTC

Tagged in: Fraud in CFTC-Regulated Markets, Ponzi Schemes,

December 14, 2023

Freepoint Commodities LLC will pay more than $98 million in civil penalties and disgorgement for improperly obtaining and trading on material non-public information. Freepoint paid millions in bribes to government officials in Brazil to obtain highly confidential information related to the purchase and sale of fuel oil. Certain members of Freepoint's oil trading team knew of and took steps to conceal the fraud by using code words, fake names, and private email addresses, all to gain unlawful competitive advantages in oil products trading. DOJ; CFTC

Tagged in: Bribery and Bid-Rigging, FCPA, Fraud in CFTC-Regulated Markets, Market Manipulation and Trading Violations, Misrepresentations, Regulatory Violations,

November 15, 2023

Phillip Gales and the entities he controlled—Tyche Asset Management LLC, Tyche Master Fund Ltd, Tyche Asset Trade LLC, Tyche Offshore Fund Ltd., Tyche Onshore Fund LP, Tyche PML Master Fund Ltd., Tyche PML Onshore Fund LP, Tyche Onshore Fund GP LLC, and Tyche Asset Trade LLC—will pay over $5.3 million in restitution and a nearly $16 million penalty for violating CFTC regulations governing commodity pools and for making false and misleading statements to the National Futures Association. Gales convinced investors he was a hedge fund magnate and claimed his Tyche entities achieved returns of over 200%, which he attributed to sophisticated technology and trading strategies. The majority of investors' funds, however, were not used to place trades but rather to fund Galles' lavish lifestyle and carry out his Ponzi scheme. CFTC

Tagged in: Fraud in CFTC-Regulated Markets, Ponzi Schemes,

October 23, 2023

Ceres Global Ag Corp. has been ordered to pay $3 million to settle charges of attempting to manipulate the price of oats futures contracts in 2016 and 2017.  According to the CFTC, a former senior official directed employees to manipulate its short position in order to affect the futures price.  CFTC

Tagged in: Fraud in CFTC-Regulated Markets,

September 29, 2023

Goldman Sachs & Co. LLC has been ordered to pay $3 million to settle charges of failing to maintain adequate supervisory systems and controls, in connection with a 2017 malfunction.  Additionally, Goldman allegedly omitted material information regarding the malfunction when responding to a CFTC request for information on how customer orders were executed.  CFTC

Tagged in: Financial and Investment Fraud, Fraud in CFTC-Regulated Markets,

September 29, 2023

Goldman Sachs, J.P. Morgan, and Bank of America and Merrill Lynch have been ordered to pay $30 million, $15 million, and $8 million respectively in connection with a variety of swap dealer failures.  Goldman Sachs failed to diligently supervise a wide range of its swap dealer activities, some of them since 2013, and failed to accurately or timely report a significant portion of its swap data.  J.P. Morgan underreported or misreported over 40 million swap transactions.  Bank of America and Merrill Lynch underreported or misreported almost 4 million swap transactions.  CFTC

Tagged in: Financial Institution Fraud, Fraud in CFTC-Regulated Markets,

September 29, 2023

Interactive Brokers Corp., an introducing broker, and Interactive Brokers LLC, a futures commission merchant, has been ordered to pay $20 million to the CFTC and $35 million to the SEC to resolve charges of failing to maintain and preserve records.  The records included communications through unapproved channels, such as text and WhatsApp, which employees at all levels used and which the company failed to maintain and preserve.  The SEC also resolved charges against other firms for similar misconduct, including Robert W. Baird & Co. Inc. ($15 million); William Blair & Company LLC and William Blair Investment Management LLC ($10 million); Nuveen Securities LLC ($8.5 million); Fifth Third Securities Inc. ($8 million); and Perella Weinberg Partners LP, Tudor, Pickering, Holt & Co. Securities LLC, and Perella Weinberg Partners Capital Management LP ($2.5 million).  CFTC; SEC

Tagged in: Financial Institution Fraud, Fraud in CFTC-Regulated Markets, SEC Whistleblower Reward Program,

September 7, 2023

In the highest civil monetary penalty ever ordered in a CFTC case, South Africa-based Mirror Trading International Proprietary Limited (MTI) and its founder and CEO, Cornelius Johannes Steynberg, have been ordered to pay $1.7 billion for defrauding over 23,000 U.S.-based retail foreign currency (forex) investors and failing to comply with commodity pool operator regulations.  MTI and Steynberg solicited Bitcoin from U.S. as well as foreign investors, purportedly trading off-exchange retail forex through an unregistered commodity pool, when in fact they were enriching themselves through a multilevel marketing scheme.  CFTC

Tagged in: Cryptocurrency, Financial and Investment Fraud, Fraud in CFTC-Regulated Markets,

August 29, 2023

Goldman Sachs & Co. has been ordered to pay $5.5 million to settle CFTC charges of violating the cease-and-desist provision of a previous order.  The 2019 order had involved a failure of Goldman’s hardware to record calls to its trading and sales desk for 20 calendar days in 2014.  The present order covers two additional failures involving Goldman’s use of two third-party vendors to record and retain audio calls.  During the early days of the pandemic, increased usage led to increased failures of the vendors’ hardware and software, which in turn led to additional failures to fully record and retain thousands of calls per CFTC recordkeeping requirements.  CFTC

Tagged in: Financial Institution Fraud, Fraud in CFTC-Regulated Markets,

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