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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 15, 2014

The CFTC issued an order filing and simultaneously settling charges against Morgan Stanley Smith Barney, LLC, a CFTC-registered Futures Commission Merchant, for improper supervision and records violations. The CFTC order requires Morgan Stanley to pay a $280,000 civil monetary penalty and to disgorge commissions it earned from the subject accounts. CFTC

September 9, 2014

The CFTC settled charges against Zulutrade, Inc., a CFTC-registered Introducing Broker located in Piraeus, Greece, for failure to diligently supervise activities relating to its business as a CFTC registrant.  The settlement order requires Zulutrade to pay a $150,000 civil monetary penalty and disgorge $80,000 in commissions and fees it earned from accounts that were related to the alleged supervisory failure.  CFTC

September 9, 2014

The CFTC filed a civil enforcement Complaint against attorney Jay Bruce Grossman, who practices law in Fort Lauderdale, Florida, alleging that beginning on July 16, 2011, Grossman willfully aided and abetted multiple clients in their operation of illegal and fraudulent precious metals schemes, in violation of the Commodity Exchange Act.  CFTC

August 27, 2014

The CFTC issued an Order filing and simultaneously settling charges against financial services company FirstRand Bank, Ltd., headquartered in Johannesburg, South Africa, for executing unlawful prearranged, noncompetitive trades involving corn and soybean futures contracts on the Chicago Board of Trade, a designated contract market of the CME Group.   CFTC

August 26, 2014

The CFTC issued an Order filing and simultaneously settling charges against Merrill Lynch, Pierce, Fenner & Smith Incorporated for failing to diligently supervise its officers’, employees’, and agents’ processing of futures exchange and clearing fees charged to its customers from at least January 1, 2010 through April 2013.  CFTC

August 21, 2014

The CFTC issued an Order filing and settling charges against S.J. Woods, Inc. and its owners, Peter Blanco and Paul Proscia, involving their participation in illegal, off-exchange financed transactions in precious metals with retail customers. The Order requires them to pay restitution totaling $2,971,992.23 to their customers, imposes permanent trading bans against them, and prohibits them from violating the Commodity Exchange Act, as charged.   CFTC

August 11, 2014

The CFTC entered an Order requiring Jacob N. Stein, individually and doing business as TEPdesign, Inc., to pay restitution of $244,400 to defrauded customers and a $100,000 civil monetary penalty, for committing fraud and misappropriation in connection with a commodity pool that traded leveraged or margined off-exchange foreign currency contracts (forex).  CFTC

August 7, 2014

The CFTC charged Edwin A. Vasquez and his company Vasquez Global Investments with misappropriation, solicitation fraud, and issuing false statements in connection with the operation of an unregistered commodity trading pool.  According to the CFTC Complaint, Vasquez and his company defrauded and deceived at least 19 participants who invested at least $583,491 in a commodity pool commonly known as the VGI pool.  CFTC

August 7, 2014

The CFTC obtained an order against Florida residents John P. D’Onofrio, George E. Sarafianos, Scott D. Piccininni and their Florida companyAmeriFirst Management to jointly pay more than $25M in restitution and a $10M penalty for operating a fraudulent precious metals scheme.  Specifically, the order found the defendants operated an illegal, off-exchange precious metals scheme and made numerous fraudulent misrepresentations, false reports, and statements in connection with the scheme.  CFTC

August 7, 2014

Florida resident Lawrence Scott Spain and his company Palm Beach Capital were ordered to pay $527,000 for engaging in illegal, off-exchange precious metals transactions.  The order stems from a CFTC Complaint filed in May 2014 charging Spain and his company with violating the Commodity Exchange Act by these illegal transactions.  CFTC
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