Have a Claim?

Click here for a confidential contact or call:

1-212-350-2774

CFTC Enforcement Actions

The Commodity Futures Trading Commission (CFTC) is the United States agency with primary responsibility for enforcing the Commodity Exchange Act (CEA) and regulating commodity futures and related markets. Whistleblowers with knowledge of violations of laws and regulations enforced by the CFTC can submit a claim under the CFTC Whistleblower Reward Program, and may be eligible to receive a monetary reward and protection against retaliation by employers.

Below are summaries of recent CFTC settlements or successful enforcement actions. If you believe you have information about fraud which could give rise to a CFTC enforcement action and claim under the CFTC Whistleblower Reward Program, please contact us to speak with one of our experienced whistleblower attorneys.

October 12, 2018

Former commodity traders Yuchun "Bruce" Mao, Kamaldeep Gandhi, and Krishna Mohan have been charged with commodities fraud and spoofing in a scheme that cost investors on the Chicago Mercantile Exchange (CME) and Chicago Board of Trade (CBOT) over $60 million in losses. Over the course of two years, the three allegedly placed thousands of orders and canceled them before execution in order to drive up demand. When defendant Gandhi moved onto another firm, he allegedly continued placing spoof orders. Along with defendant Mohan, Gandhi has agreed to plead guilty to the charges; no word yet on how Mao will plead. CFTC; DOJ; USAO SDTX

October 11, 2018

A Washington couple will serve time in federal prison for defrauding investors of $12.7 million over the course of 7 years. Delving into their ties to various religious organization, Laurence Hong and Grace Hong convinced more than 55 clients to invest their life savings in a hedge fund that they called Pishon Holdings, by claiming that Laurence had experience investing vast sums of money on behalf of wealthy families and Grace had experience working for an investment firm. In fact, Laurence, also known as Sung Hong, had just completed a nearly 3 year sentence for investment fraud when he began the new scheme. With the funds they stole from investors, the couple paid for rent on a house, bought a yacht and multiple luxury vehicles (including an Aston Martin, BMW, Lamborghini, and Maserati), and went on extravagant family vacations to the Bahamas and Beverly Hills. Laurence will now serve another 15 years in prison, and Grace, also known as Hyun Joo Hong, will serve 6 years. They have also been ordered to pay restitution of more than $12.7 million. USAO WDWA

October 1, 2018

The Bank of of Nova Scotia has agreed to pay an $800,000 penalty after self-reporting that certain of its traders engaged in unlawful spoofing by placing orders to buy or sell precious metals futures contracts with the intent to cancel the orders before execution. The spoofed orders were meant to create the impression of market interest in order to induce other market participants to respond to genuine orders placed by the traders.  CFTC

September 19, 2018

Bank of America, N.A., has been ordered by the CFTC to pay a $30 million penalty for its attempted manipulation of the USD ISDAFIX benchmark between 2007 and 2012.  During the relevant time period, the U.S. Dollar International Swaps and Derivatives Association Fix, a leading global benchmark referenced in a range of interest rate products, was set each day.  BofA attempted to manipulate USD ISDAFIX through false, fraudulent, and misleading actions in critical time periods designed to influence the final published USD ISDAFIX.  The CFTC enforcement action against BofA is one of a series involving manipulative conduct in connection with the USD ISDAFIX benchmark.  CFTC

September 18, 2018

ICAP Capital Markets LLC has been ordered by the CFTC to pay a $50 million penalty for its role in aiding and abetting attempts by several of its bank clients to manipulate the USD ISDAFIX benchmark between 2007 and 2012.  During the relevant time period, the U.S. Dollar International Swaps and Derivatives Association Fix, a leading global benchmark referenced in a range of interest rate products, was set each day in a process initiated by ICAP, which captured and recorded swap rates and spreads based on trading activity at specific times on ICAP’s trading platform for swap spreads and on an affiliate’s platform for U.S. Treasury securities.  ICAP knew that its bank customers often attempted to manipulate USD ISDAFIX by bidding, offering, and executing transactions at critical time periods, and assisted them in their manipulative attempts.  The CFTC enforcement action against ICAP is one of a series involving manipulative conduct in connection with the USD ISDAFIX benchmark. CFTC

July 30, 2018

The CFTC ordered Chicago-based R.J. O’Brien & Associates (“RJO”) to pay a $600,000 civil penalty in connection with the company’s failure to detect its client’s post-execution trade allocation scheme. As a registrant, RJO had a duty to monitor the relevant transactions for suspicious activity, but failed to adequately do so, according to the Commission. As a result, the scheme went undetected, and the client was able to allocate profitable trades to specific accounts, sending less profitable trades to the customer or Pool accounts. CFTC

July 19, 2018

A federal court in Utah has ordered an Estonian currency dealing company, Tallinex, to pay $10.2M in restitution and an additional $681K in fines for operating as an unregistered foreign exchange dealer and soliciting US customers. The CFTC also alleged that Tallinex defrauded its customers by making false or misleading representations about customer funds being protected in case of the company’s collapse. A Nevada-based broker, General Trader Fulfillment, that introduced American customers to Tallinex was also ordered to pay an $85k civil penalty. CFTC

July 19, 2018

A federal court in Washington, DC has ordered two Irish companies, Intrade the Prediction Market Limited and Trade Exchange Network, to pay $3M in penalties relating to the two companies permitting US customers to trade over 5,000 binary options on off-exchange options platforms, as outlawed by the CFTC. Trade Exchange Network was also in violation of a 2005 cease and desist order issued by the CFTC. CFTC

July 12, 2018

The CFTC announced an award of approximately $30 million to a whistleblower who voluntarily provided key original information that led to a successful enforcement action. The award is the largest award made by the CFTC’s Whistleblower Program to date and is the fifth award made by the program. Previously, the highest award amount paid to a CFTC whistleblower was in March 2016 of more than $10 million (see CFTC Press Release 7351-16, CFTC Announces Whistleblower Award of More Than $10 Million). CFTC
1 2 3 4 37

Learn about Whistleblower Rewards Programs

Newsletter

Subscribe to receive email updates from the Constantine Cannon blogs

Sign up for: