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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.

				

			

			
						
					
			

	
		
		

			

				
				
April 30, 2018

				 The CFTC issued an order filing and settling charges against Glencore Agriculture B.V.,f/k/a Glencore Grain B.V. (Glencore B.V.), located in Rotterdam, the Netherlands, and Glencore Ltd., located in Stamford, Connecticut, finding that on multiple trading days during May 2013, June 2013, May 2014, and June 2014, Glencore B.V. and Glencore Ltd. held net positions in the ICE Futures Cotton No. 2 contracts (cotton futures) that, on an aggregated basis, exceeded the speculative position limits established by the CFTC. In addition, the CFTC Order finds that on twenty-four occasions between January 2013 and November 2015, Glencore B.V. and Glencore Ltd. executed exchange of futures for physical transactions (EFPs) opposite each other’s cotton futures trading accounts, even though their accounts were not independently controlled as required for such transactions not to constitute illegal wash trades. And, on at least two occasions in 2013 and 2014, Glencore B.V. submitted to the CFTC a Form 304 that failed to represent accurately all required information, including its short cash sales commitments, according to the CFTC Order. The CFTC Order requires Glencore B.V. and Glencore Ltd., jointly and severally, to pay a $2 million civil monetary penalty and to cease and desist from further violations of the Commodity Exchange Act (CEA) and CFTC Regulations, as charged. CFTC				 			
	
		
		
	


 			




	
		
		

			

				
				
April 30, 2018

				 The CFTC filed a federal civil enforcement action in the U.S. District Court for the Western District of Texas against Defendant Charles H. McAllister, of Auburn, Alabama, charging him with fraud and misappropriation in connection with contracts of sale of precious metals through his company, BullionDirect, Inc. (BDI).  McAllister has never been registered with the CFTC in any capacity. CFTC				 			
	
		
		
	


 			




	
		
		

			

				
				
April 25, 2018

				 The CFTC filed a civil enforcement action charging Defendants Michael Salerno of Chadds Ford, Pennsylvania, and his companies Black Diamond Forex LP and BDF Trading LP, both Pennsylvania limited partnerships, and Advanta FX, a Pennsylvania corporation, with fraudulently soliciting members of the public to become foreign currency (forex) proprietary traders and with misappropriating the traders’ funds for purposes other than forex trading. CFTC				 			
	
		
		
	


 			




	
		
		

			

				
				
April 24, 2018

				 The CFTC announced the filing of a civil enforcement action on April 23, 2018, in the U.S. District Court for the Eastern District of New York charging Defendant Kevin Scott Antonovich of Woodside, New York, with misappropriation of customer funds and fraudulent solicitation in connection with investments in a commodity pool. The CFTC Complaint also charges Antonovich with registration violations. As alleged in the CFTC Complaint, from September 2015 through August 2016, Antonovich fraudulently solicited and received approximately $284,000 from at least 154 pool participants in connection with pooled investments in off-exchange binary options. As further alleged, Antonovich misappropriated approximately $124,000 of pool participant funds for business expenses and his personal use, made false and misleading representations to pool participants, and fabricated documents purporting to show funds available for return to pool participants. CFTC				 			
	
		
		
	


 			




	
		
		

			

				
				
April 18, 2018

				 The CFTC announced the filing of a Complaint in the U.S. District Court for the Eastern District of New York charging Defendants Blake Harrison Kantor, who frequently uses the alias Bill Gordon, and Nathan Mullins, both of New York, and the entities Blue Bit Banc, located in the United Kingdom, Blue Bit Analytics, Ltd.(Analytics) located in Nevis, Turks, and Caicos, and Mercury Cove, Inc. and G. Thomas Client Services (G. Thomas), both New York corporations, with operating a  fraudulent scheme involving binary options and a virtual currency known as ATM Coin. CFTC				 			
	
		
		
	


 			




	
		
		

			

				
				
April 13, 2018

				 The CFTC announced that Judge Paul L. Maloney of the U.S. District Court for the Western District of Michigan entered a Consent Order for Permanent Injunction (Consent Order) and an Order regarding a personal trading ban (Supplemental Order), which resolve charges against Defendant Jerry Stauffer, who resided in Traverse City, Michigan, for operating a fraudulent off-exchange foreign currency (forex) pool scheme. 

The February 13, 2018 Consent Order stems from a CFTC Enforcement Complaint filed on February 25, 2015 (see CFTC Complaint and Press Release 7131-15). The Consent Order finds that Stauffer, individually and while acting as a commodity pool operator, fraudulently solicited, issued false statements and misappropriated pool participant funds in connection with the operation of a commodity pool from June 2010 to February 2015. According to the Consent Order, Stauffer guaranteed pool participants’ principal investment against risk of loss and further guaranteed profits on those investments. To perpetuate the fraud, Stauffer issued false account statements to pool participants that represented purported profits. CFTC				 			
	
		
		
	


 			




	
		
		

			

				
				
April 13, 2018

				 The CFTC filed a civil enforcement action in the U.S. District Court for the Eastern District of Virginia against Defendants The Kane Capital Investment Group, LLC (Kane Capital), a commodity pool organized in Virginia, and its principal, Amrit Jaswant Singh Chahal (Chahal) of Fairfax, Virginia. The CFTC Complaint charges Defendants with commodity futures fraud, commodity pool fraud, and illegally commingling Kane Capital’s funds with Chahal’s personal funds. The Complaint also charges Chahal with failing to register with the CFTC as a Commodity Pool Operator, as required. CFTC				 			
	
		
		
	


 			




	
		
		

			

				
				
April 12, 2018

				 The CFTC announced that Judge John J. Tuchi of the U.S. District Court for the District of Arizona entered an Order of Default Judgment and Permanent Injunction against Defendants Cory Williams of Gilbert, Arizona, and his company, Williams Advisory Group, LLC (WAG), in connection with a commodity pool fraud that victimized 40 pool participants, including Williams’ family, friends, neighbors, and members of his church and other related churches in and around Phoenix, Arizona. The court’s Order requires Williams and WAG, jointly and severally, to pay restitution of $9,725,017 to defrauded participants and a civil monetary penalty of $9,725,017. The Order also imposes permanent trading and registration bans on the Defendants and prohibits them from violating provisions of the Commodity Exchange Act and CFTC Regulations, as charged. CFTC				 			
	
		
		
	


 			




	
		
		

			

				
				
April 12, 2018

				 The CFTC filed a civil enforcement action in the U.S. District Court for the Southern District of New York against Defendants Kevin P. Whylie of Mamaroneck, New York; Matthew James Zecchini of East Islip, New York; and Algointeractive Inc, a New York corporation owned and controlled by Whylie and Zecchini. The CFTC Complaint charges that, from approximately April 2016 through the present, Defendants engaged in a fraudulent scheme to solicit at least $300,000 from members of the public to participate in a pooled investment vehicle for futures trading, misappropriated and commingled commodity pool participants’ funds, issued false account statements to pool participants to conceal their trading losses and misappropriation, engaged in false advertising, and failed to register with the CFTC, as required. CFTC				 			
	
		
		
	


 			




	
		
		

			

				
				
April 9, 2018

				 The CFTC issued an Order filing and settling charges against Anuj C. Singhal, a Dallas, Texas resident and registered floor broker, for engaging in the disruptive trading practice of “spoofing” (bidding or offering with the intent to cancel bids or offers before execution) through manual trading in the Chicago Mercantile Exchange (CME) wheat futures market between at least March and June 2016 (the Relevant Period).  The CFTC Order finds that Singhal frequently engaged in this spoofing activity by first entering larger limit orders on one side of the CME wheat futures market, and at times, several larger orders in succession.  The Order finds that Singhal then entered a smaller, aggressive order (a market order) on the opposite side of the market, which was usually filled instantaneously or within a fraction of a second.  In most instances, the Order finds, after the smaller order was entered and executed Singhal continued to modify his larger orders further away from the market, each modification generally within seconds of the last, but in all such instances those larger orders were cancelled without any part of the order being filled.  The Order finds that Singhal repeated this trading pattern numerous times during the Relevant Period. CFTC				 			
	
		
		
	


 			


											

						

								

									
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