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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.

				

			

			
						
					
			

	
		
		

			

				
				
January 11, 2017

				 J.P. Morgan Securities LLC was ordered to pay a $900,000 civil monetary penalty by the CFTC for failing to diligently supervise its officers’, employees’, and agents’ processing of exchange and clearing fees it charged customers for trading and clearing on the Chicago Mercantile Exchange. The penalty covers the failures from 2010-2014. This is the third action the CFTC has brought over a clearing firm’s supervisory failures over fee processing. CFTC				 					 

						
Tagged in:
													  Fraud in CFTC-Regulated Markets, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 9, 2017

				 EJS Capital Management, LLC,  Alex Vladimar Ekdeshman, and Edward J. Servider were ordered to pay over $11.6 million in sanctions for their role in a fraudulent, off-exchange foreign currency scheme involving misappropriation of customer funds and false statements to customers to conceal the fraud. The order was entered by the United States District Court for the Southern District of New York. A number of Relief Defendants were ordered to pay $760,375 in disgorgement. CFTC				 					 

						
Tagged in:
													  Foreign Exchange, 
													  Misrepresentations, 
													  Regulatory Violations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 5, 2017

				 Jon S. Corzine was ordered to pay a $5 million penalty for his role in MF Global, Inc.’s unlawful use of customer funds through a consent order entered by Judge Victor Marrero of the United States District Court for the Southern District of New York. Corzine was charged with overseeing the misuse of nearly $1 billion in customer funds. Additionally, Edith O’Brien, the former assistant treasurer of MF global was ordered to pay a $500,000 civil monetary penalty for aiding and abetting the violations by MF Global. CFTC				 					 

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

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 28, 2016

				 The CFTC filed a civil enforcement action against Brett G. Hartshorn for fraudulently soliciting/managing at least $906,000 to invest in off-exchange foreign currency. Hartshorn is charged with misappropriating at least $57,414 of client funds, failing to register with the CFTC as a Commodity Trading Advisor, and failing to produce books and records to the agency. CFTC				 					 

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

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 21, 2016

				 Goldman Sachs was ordered to pay a $120 million civil monetary penalty by the CFTC for attempted manipulation of and false reporting of U.S. dollar ISDAFIX benchmark swap rates. The CFTC found that between January 2007 and continuing through March 2012, Goldman attempted to manipulate and made false reports concerning the U.S. Dollar International Swaps and Derivatives Association Fix, a global benchmark for interest rate products. Goldman was additionally ordered to cease and desist from further violations and take specified remedial steps. CFTC.				 					 

						
Tagged in:
													  Financial Institution Fraud, 
													  Fraud in CFTC-Regulated Markets, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 20, 2016

				 Igor B. Oystacher and 3Red Trading LLC were ordered to pay $2.5 million in a Consent Order ordered by Judge Amy J. St. Eve of the U.S. District Court for the Northern District of Illinois. for spoofing and employment of a manipulative and deceptive device while trading futures contracts on multiple futures exchanges. The two parties must jointly and severally pay a $2.5 million civil monetary penalty and are required to have an independent monitor assess and monitor all futures trading for three years. CFTC.				 					 

						
Tagged in:
													  Fraud in CFTC-Regulated Markets, 
													  Market Manipulation and Trading Violations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 19, 2016

				 Convergent Wealth Advisors LLC was ordered to pay an $800,000 civil monetary penalty by the CFTC for fraudulent omissions and false statements in connection an employee’s commodity pool. The fraudulent representations were made by David Zier who solicited Convergent clients for investment in his company ZAM LLC. Zier made false representation about ZAM’s performance saying it was profitable and producing false performance data. CFTC.				 					 

						
Tagged in:
													  Fraud in CFTC-Regulated Markets, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 14, 2016

				 Yumin Li was ordered to pay $1.2 million in a judgment ordered by Judge Sara L. Ellis of the United States District Court for the Northern District of Illinois. Li was found to have stolen $300,000 from his former employer by trading the employer’s account noncompetitively against an account belonging to co-Defendant Kering Capital Ltd., a British Virgin Islands company formed by Li’s mother. Li was ordered to pay over $300,000 in restitution to his former employer and $900,000 in a civil monetary penalty. CFTC.				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 7, 2016

				 French swap dealer Société Générale SA was ordered to pay a $450,000 civil monetary penalty and to cease and desist from committing further violations of the CEA and CFTC regulations.  Société Générale failed to properly report certain non-deliverable forward transactions to a swap data repository (SDR) and failed to report to an SDR a large number of FX swap, FX forward, and non-deliverable forward transactions. CFTC				 					 

						
Tagged in:
													  Fraud in CFTC-Regulated Markets, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 30, 2016

				 Alvin Guy Wilkinson and his entities Chicago Index Partners, L.P. and Wilkinson Financial Opportunity Fund, L.P. were ordered to pay $21.8 million in a default judgment ordered by Judge Virginia Kendall of the United States District Court for the Northern District of Illinois. Wilkinson and his entities ran a commodity pool and were accused of misappropriating pool funds, fraudulently soliciting pool participants, issuing false statements to customers, and providing false financial information the National Futures Association. The judgment included $12,382,207.20 in civil monetary penalties, $4,127,402.40 in disgorgement, and $5,389,381 in restitution. CFTC				 					 

						
Tagged in:
													  Fraud in CFTC-Regulated Markets, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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