Archive

September 29, 2020

The CFTC has awarded a whistleblower approximately $250,000 for providing significant information that led to an investigation. Although the whistleblower also provided substantial assistance during the investigation, the award was reduced because the whistleblower did not report the violations in a timely manner. CFTC

Tagged in: Anonymity, CFTC Whistleblower Reward Program, Financial and Investment Fraud, Fraud in CFTC-Regulated Markets, Whistleblower Rewards,

September 28, 2020

Citibank N.A. and its related entities Citigroup Energy Inc. and Citigroup Global Markets, Inc. will pay a $4.5 million penalty for maintaining an inadequate telephone audio recording and preservation system. According to the charges, Citibank internal reporting described the audio preservation system as having a flaw that was a “ticking time bomb” that could lead to the deletion of audio recordings. When Citibank was required to produce recordings in response to a CFTC subpoena, the company disclosed that millions of audio files for 982 users had been deleted as a result of the flaw. CFTC

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

September 11, 2020

Two whistleblowers who made specific, credible, and timely reports to the CFTC of an ongoing fraud have been awarded an undisclosed sum. The first whistleblower, based in the U.S., made the first report and provided information and documents that would have otherwise been difficult to obtain. The second whistleblower, based abroad, provided additional information, including the wrongdoers’ attempts to avoid detection. According to the CFTC, the whistleblowers’ joint efforts helped lead to a successful enforcement action. CFTC

Tagged in: Anonymity, CFTC Whistleblower Reward Program, Financial and Investment Fraud, Fraud in CFTC-Regulated Markets, International Whistleblowers, Whistleblower Rewards,

September 4, 2020

An anonymous individual received a whistleblower reward in an unspecified amount, after providing information that caused the CFTC to open an investigation into ongoing fraudulent activity affecting individual investors. The whistleblower provided assistance and documentation, enabling the Commission to act quickly to stop fraud that would have been difficult to detect without the whistleblower's information. CFTC

Tagged in: CFTC Whistleblower Reward Program, Financial and Investment Fraud, Fraud in CFTC-Regulated Markets, Whistleblower Case, Whistleblower Rewards,

August 19, 2020

The Bank of Nova Scotia (Scotiabank) has been ordered to pay $127.4 million to the CFTC and $60.4 million in criminal fines, forfeiture, and restitution to the DOJ for attempting to manipulate prices and spoofing in precious metals futures contracts, making false and misleading statements to investigators, and failing to comply with swap dealer conduct and supervision requirements. The alleged misconduct occurred over the eight years ending in 2016 and involved four precious metals traders in New York, London, and Hong Kong. From the penalty paid to the CFTC, a record-breaking $42 million will go toward resolving the price manipulation and spoofing allegations, and a record-breaking $17 million will go toward resolving the false and misleading statements allegations. In addition to the fines, Scotiabank has entered into a deferred prosecution agreement and agreed to retain an independent monitor. CFTC; DOJ; USAO NJ

Tagged in: Criminal Proceedings, Financial and Investment Fraud, Financial Institution Fraud, Fraud in CFTC-Regulated Markets, Misrepresentations,

August 4, 2020

New York Mercantile Exchange (NYMEX) and former employees William Byrnes and Christopher Curtin have been ordered to pay a $4 million civil monetary penalty for violating the Commodity Exchange Act (CEA) and CFTC regulations. Between 2008 and 2010, while employed at NYMEX, Byrnes and Curtin repeatedly disclosed material non-public information to commodities broker and defendant Ron Eibschutz. Byrnes’ and Curtin’s liability is capped at $300,000 and $200,000, respectively, and they are permanently banned from trading commodity interests and registering with the CFTC. This is the first time the CFTC has charged an exchange with such violations. CFTC

Tagged in: Fraud in CFTC-Regulated Markets,

July 27, 2020

The CFTC has awarded approximately $9 million—one of the largest awards ever in the history of its whistleblower program—to an unnamed whistleblower. Because of the whistleblower’s timely tip, the CFTC was able to open an investigation that led to a successful enforcement action. CFTC

Tagged in: CFTC Whistleblower Reward Program, Fraud in CFTC-Regulated Markets, Whistleblower Case, Whistleblower Rewards,

July 21, 2020

Two unidentified whistleblowers will share a whistleblower reward totaling $1 million. While the underlying enforcement action is not identified, the CFTC disclosed that information from the first whistleblower caused it to open an investigation, and information from the second whistleblower, who participated in the underlying scheme, significantly contributed to the investigation. CFTC

Tagged in: CFTC Whistleblower Reward Program, Financial and Investment Fraud, Fraud in CFTC-Regulated Markets, Whistleblower Case, Whistleblower Rewards,

July 10, 2020

Perfection PR Firm LLC (PPR) and owner Joshua Christian McDonald have been ordered to pay $360,565 in restitution and $935,907 in civil monetary penalty for committing fraud, misappropriating customer funds, and operating without proper registration. While running an off-exchange foreign currency (forex) trading scheme, the defendants solicited $440,000 from 12 customers by promising them growth in value of 10-50% per month. However, most or all of the funds that were not lost in trades were eventually transferred to McDonald. CFTC

Tagged in: Criminal Proceedings, Fraud in CFTC-Regulated Markets,

July 6, 2020

The CFTC has simultaneously filed and resolved charges against Illinois-based Foremost Trading LLC and its principal, Mark Miller. According to the orders, Miller misappropriated customer funds and caused over 500 unauthorized and fictitious trades in proprietary accounts he owned with family and a customer account over which he had trading authority. In addition to being suspended from trading for two years and permanently barred from future registration with the CFTC, Miller will pay a $250,000 civil penalty. Together with Foremost, which will separately pay a $200,000 civil penalty, Miller will pay almost $725,000 in restitution. CFTC

Tagged in: Fraud in CFTC-Regulated Markets,

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