Archive

July 5, 2022

BNP Paribas has been ordered to pay a $6 million civil monetary penalty for its failure to correctly swap transactions as required by the Commodity Exchange Act and CFTC regulations.  According to the CFTC, BNPP failed to make more than 300,000 reports involving more than 6,000 swap transactions by U.S. persons incorrectly classified as non-U.S. persons.  Additionally, BNPP incorrectly reported thousands of bunched trades as new trades, and incorrectly reported approximately 3,000 commodity swaps as equity trades.  CFTC

June 30, 2022

Interactive Brokers LLC has been ordered to pay over $1 million in disgorgement and civil monetary penalty for its failure to supervise employees’ handling of exchange fees charged to customers.  By failing to ensure that its employees accurately assessed fees, Interactive Brokers overcharged its customers over $710,000.  CFTC

June 24, 2022

Starberry Limited will pay over $1.3 million in a civil monetary penalty for acting as an unregistered futures commission merchant and will disgorge the same amount in unlawfully-earned commission and fees. Starberry accepted more than $400 million from a foreign customer, invested it in crude oil futures contracts through more than 12,500 NYMEX WTI trades, and earned over $86 million in profits for the investor. CFTC

May 24, 2022

Switzerland-based mining and commodity trading firm Glencore International A.G. and an affiliate have agreed to pay over $1.1 billion in criminal penalties and forfeitures, and will plead guilty to violations of the Foreign Corrupt Practices Act and conspiracy to engage in commodity price manipulation.  In addition, the companies will pay over $1.186 billion in civil penalties and disgorgement in settlement with the CFTC.  As part of the criminal plea agreement, Glencore admitted that between 2007 and 2018, it corruptly provided more than $100 million in payments and other things of value to intermediaries for the payment of bribes to officials in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea, Brazil, Venezuela, and the Democratic Republic of the Congo.  With respect to the commodity price manipulation scheme, the CFTC found that from as early as 2007 through at least 2018, Glencore sought to increase profits from its physical and derivatives oil products trading by manipulating or attempting to manipulate four U.S. based S&P Global Platts physical oil benchmarks and related futures and swaps.  Criminal fines and forfeitures total over $700 million for the FCPA violations and nearly $486 million for the for the market manipulation violations, which amounts are subject to credits for amounts paid to the CFTC and foreign authorities including the United Kingdom.  The $1.186 billion CFTC resolution will also be reduced, with Glencore receiving credit for payments in the criminal resolutions.  DOJ; USAO SDNY; CFTC

May 13, 2022

Kraft Foods Group, Inc. and Mondelez Global LLC have been ordered to pay $16 million after being found to manipulate the prices of cash wheat and wheat futures, and holding wheat futures positions in excess of speculative position limits established by the CFTC.  The companies allegedly engaged in the scheme in order to lower cash wheat prices after they rose in the summer of 2011.  The misconduct earned the two companies over $5.4 million in profits.  CFTC

May 5, 2022

Arthur Hayes, Benjamin Delo, and Samuel Reed, co-founders of BitMEX, were ordered to pay $30 million for AML violations and for illegally operating a cryptocurrency derivatives trading platform. From late 2014 through 2020, the defendants failed to implement and enforce preventative controls against unlawful conduct. BitMEX operated without CFTC approval to operate as a Designated Contract Market or a Swap Execution Facility. Further, BitMEX operated without registration as a Futures Commission Merchant, failed to implement a Customer Information Program, did not employ proper KYC procedures, and failed to implement an adequate AML program. CFTC

April 8, 2022

Danish resident Casper Mikkelsen, also known as Carsten Nielsen, Brian Thomson, Thomas Jensen, and Casper Muller, has been ordered to pay $1.2 million in restitution and $3.6 million in penalties after he was found to have misappropriated client funds for his personal use, used earlier investor funds to pay later investors, and failed to register as a commodity trading advisor.  Mikkelsen’s victims had believed they were investing their funds to trade in forex.  CFTC

March 28, 2022

The CFTC has awarded four whistleblowers $625,000 for their contributions to the agency’s enforcement actions.  Three of the whistleblowers provided support jointly, while a fourth provided a high level of assistance.  CFTC

March 18, 2022

The CFTC has made a $10 million award to a whistleblower whose tip sparked an investigation, and whose supplemental information helped move it along.  CFTC

March 15, 2022

London-based swap dealer ED&F Man Capital Markets, Ltd. will pay $3.25 million to resolve claims that it failed to comply with swap dealer requirements including by failing to report accurate swaps data to a swaps data repository, failing to disclose to its U.S. swaps counterparties that affiliated-entity proprietary traders had access to counterparties’ trade information, and failing to disclose mid-market marks to counterparties. The CFTC further found that the entity failed to maintain an adequate supervisory system or perform its supervisory obligations diligently.  CFTC