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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.

				

			

			
						
					
			

	
		
		

			

				
				
September 29, 2017

				  – he Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against Logista Advisors LLC (Logista), a crude-oil-trading firm based in Houston, Texas. The Order finds that, from approximately September 2013 through October 2014, Logista failed to diligently supervise the handling by its employees and officers of commodity interest accounts and other activities relating to Logista’s business as a CFTC registrant, particularly in connection with its former employee’s improper crude oil futures trading on a foreign exchange and Logista’s response to the exchange’s inquiry into that trader’s misconduct. Logista is registered with the CFTC as a Commodity Trading Advisor and Commodity Pool Operator. The Order requires Logista to pay a $250,000 civil monetary penalty and cease and desist from violating the CFTC Regulation governing diligent supervision. CFTC				 					 

						
Tagged in:
													  Fraud in CFTC-Regulated Markets, 
													  Regulatory Violations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 29, 2017

				 The Commodity Futures Trading Commission (CFTC) on September 28, 2017, filed a civil enforcement action in the U.S. District Court for the Southern District of New York against Defendants Hasan Sarwar a/k/a Alexander Sarwar (d/b/a Profit Management Int) of Rancho Cucamonga, California, and his spouse Rachida Elfrimi (d/b/a Profit Management). The CFTC Complaint charges the Defendants with defrauding commodity pool participants, making Ponzi-style payments to pool participants from other participants’ funds, comingling of pool funds, and failing to register with the CFTC as Commodity Pool Operators, as required. CFTC				 					 

						
Tagged in:
													  Fraud in CFTC-Regulated Markets, 
													  Misrepresentations, 
													  Ponzi Schemes, 
													  Regulatory Violations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 28, 2017

				 The Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against Morgan Stanley & Co. LLC (MSCO), a Delaware limited liability company headquartered in New York City, for failing to diligently supervise the reconciliation of exchange and clearing fees with the amounts it ultimately charged customers for certain transactions on the CME Group, ICE Futures US, and other exchanges. MSCO is registered with the CFTC as a Futures Commission Merchant and a provisionally registered Swap Dealer. The CFTC Order requires MSCO to pay a $500,000 civil monetary penalty and cease and desist from violating the CFTC Regulation governing diligent supervision. CFTC				 					 

						
Tagged in:
													  Fraud in CFTC-Regulated Markets, 
													  Regulatory Violations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 28, 2017

				 The Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against Connecticut-based Tillage Commodities, LLC (Tillage), a Commodity Pool Operator (CPO), for failure to supervise its fund administrator’s operation of the commodity pool’s bank account containing pool participants’ funds. Tillage has been registered as a CPO with the CFTC since 2013, with its principal office located in Stamford, Connecticut. The CFTC Order requires Tillage to pay a $150,000 civil monetary penalty and to cease and desist from further violations of the Commodity Exchange Act, as charged. CFTC				 					 

						
Tagged in:
													  Fraud in CFTC-Regulated Markets, 
													  Regulatory Violations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 25, 2017

				 The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against Citibank, N.A. (CBNA) and Citigroup Global Markets Limited (CGML) (collectively, Citi), for failing to report Legal Entity Identifier (LEI) information for swap transactions properly to a Swap Data Repository (SDR), failing to establish the electronic systems and procedures necessary to do so, failing to correct errors in LEI data previously reported to an SDR, and failing to perform supervisory duties diligently with respect to LEI swap data reporting, all in violation of CFTC Regulations. CFTC; subsequent proceedings				 					 

						
Tagged in:
													  Fraud in CFTC-Regulated Markets, 
													  Regulatory Violations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 22, 2017

				 The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against Merrill, Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch), a registered Futures Commission Merchant, for failing to supervise its employees’ and agents’ handling of the firm’s response to a CME Group Inc. (CME Group) investigation into futures block trade execution and recordkeeping practices at Bank of America, N.A. (BANA), a Merrill Lynch affiliate. The CFTC Order also finds that Merrill Lynch did not have adequate procedures to ensure that its employees and agents prepared and maintained accurate records of futures block trades executed by BANA and that Merrill Lynch failed to maintain records of certain futures block trades executed by BANA as required by Commission Regulations. CFTC				 					 

						
Tagged in:
													  Fraud in CFTC-Regulated Markets, 
													  Regulatory Violations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 21, 2017

				 The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of a federal civil enforcement action in the U.S. District Court for the Southern District of New York against Defendants Nicholas Gelfman, of Brooklyn, New York, and Gelfman Blueprint, Inc. (GBI), a New York corporation, charging them with fraud, misappropriation, and issuing false account statements in connection with solicited investments in Bitcoin, a virtual currency. The CFTC Complaint alleges that from approximately January 2014 through approximately January 2016, GBI and Gelfman, company Chief Executive Officer and Head Trader, operated a Bitcoin Ponzi scheme in which they fraudulently solicited more than $600,000 from approximately 80 persons, supposedly for placement in a pooled commodity fund that purportedly employed a high-frequency, algorithmic trading strategy, executed by Defendants’ computer trading program called “Jigsaw.” In fact, as charged in the CFTC Complaint, the strategy was fake, the purported performance reports were false, and — as in all Ponzi schemes — payouts of supposed profits to GBI Customers in actuality consisted of other customers’ misappropriated funds. CFTC				 					 

						
Tagged in:
													  Cryptocurrency, 
													  Fraud in CFTC-Regulated Markets, 
													  Misrepresentations, 
													  Ponzi Schemes, 
													  Regulatory Violations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 6, 2017

				 – The U.S. Commodity Futures Trading Commission (CFTC) announced that on September 6, 2017, it filed a civil injunctive enforcement action in the U.S. District Court for the Northern District of Illinois against three affiliated companies located in Newport Beach, California, Monex Deposit Company, Monex Credit Company, and Newport Services Corporation(collectively, Monex), and Monex’s principals Louis Carabini and Michael Carabini. The CFTC Complaint charges the Defendants, among other claims, with defrauding thousands of retail customers nationwide out of hundreds of millions of dollars, while executing thousands of illegal, off-exchange leveraged commodity transactions. CFTC				 					 

						
Tagged in:
													  Fraud in CFTC-Regulated Markets, 
													  Misrepresentations, 
													  Regulatory Violations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 5, 2017

				 The U.S. Commodity Futures Trading Commission (CFTC) today entered an Order requiring Dallas, Texas-based W Resources, LLC (W Resources) to pay a $150,000 civil monetary penalty for acting as a Commodity Pool Operator (CPO) without registering with the CFTC and to cease and desist from further violating the Commodity Exchange Act (CEA), as charged. The Order finds that W Resources operated W North Fund LLC, W North Fund II LLP, and W North Fund III LLP (together, W North Funds) as commodity pools by trading commodity options to hedge financial exposure to physical oil and gas assets. However, the Order finds that, beginning in or about October 2013, W Resources operated and continues to operate the W North Funds without registering with the CFTC as a CPO, in violation of the registration provisions of the CEA. CFTC				 					 

						
Tagged in:
													  Fraud in CFTC-Regulated Markets, 
													  Regulatory Violations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
August 31, 2017

				 The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against Ikon Global Markets, Inc. (Ikon) for failing to keep and promptly produce documentation for thousands of gold Exchange for Physical (EFP) trades, in violation of the Commodity Exchange Act (CEA) and CFTC Regulations. The trades were entered into by Ikon and reported to the NASDAQ OMX Futures Exchange, Inc. (NFX). The CFTC Order requires Ikon to pay a $200,000 civil monetary penalty, to cease and desist from further violations of the CEA and CFTC Regulations, as charged, and to withdraw from, and never apply for, registration with the CFTC. CFTC				 					 

						
Tagged in:
													  Fraud in CFTC-Regulated Markets, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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