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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.

August 10, 2020

Greenwich, Connecticut-based brokerage firm Interactive Brokers LLC will pay fines and disgorgement totaling $23.7 million to the SEC and CFTC, as well as a $15 million penalty to the Financial Industry Regulatory Authority (FINRA), to resolve allegations related to the firm's anti-money laundering policies.  The SEC penalty of $11.5 million resolves charges that over the course of one year the brokerage failed to file more than 150 Suspicious Activity Reports (SARs) for U.S. microcap securities trades it executed on behalf of its customers.  The SEC order finds that defendant failed to recognize red flags concerning transactions, failed to properly investigate suspicious activity, and failed to file SARs even when suspicious transactions were flagged by compliance personnel. The $11.5 CFTC penalty, together with over $700,000 in restitution, resolves charges including that the firm, which is a registered futures commission merchant, failed to detect and report suspicious transactions, including in its handling of the accounts of Haena ParkSEC; CFTC

August 4, 2020

New York Mercantile Exchange (NYMEX) and former employees William Byrnes and Christopher Curtin have been ordered to pay a $4 million civil monetary penalty for violating the Commodity Exchange Act (CEA) and CFTC regulations.  Between 2008 and 2010, while employed at NYMEX, Byrnes and Curtin repeatedly disclosed material non-public information to commodities broker and defendant Ron Eibschutz.  Byrnes’ and Curtin’s liability is capped at $300,000 and $200,000, respectively, and they are permanently banned from trading commodity interests and registering with the CFTC.  This is the first time the CFTC has charged an exchange with such violations.  CFTC

July 21, 2020

Two unidentified whistleblowers will share a whistleblower reward totaling $1 million.  While the underlying enforcement action is not identified, the CFTC disclosed that information from the first whistleblower caused it to open an investigation, and information from the second whistleblower, who participated in the underlying scheme, significantly contributed to the investigation.  CFTC

July 10, 2020

Perfection PR Firm LLC (PPR) and owner Joshua Christian McDonald have been ordered to pay $360,565 in restitution and $935,907 in civil monetary penalty for committing fraud, misappropriating customer funds, and operating without proper registration.  While running an off-exchange foreign currency (forex) trading scheme, the defendants solicited $440,000 from 12 customers by promising them growth in value of 10-50% per month.  However, most or all of the funds that were not lost in trades were eventually transferred to McDonald.  CFTC

July 6, 2020

The CFTC has simultaneously filed and resolved charges against Illinois-based Foremost Trading LLC and its principal, Mark Miller.  According to the orders, Miller misappropriated customer funds and caused over 500 unauthorized and fictitious trades in proprietary accounts he owned with family and a customer account over which he had trading authority.  In addition to being suspended from trading for two years and permanently barred from future registration with the CFTC, Miller will pay a $250,000 civil penalty.  Together with Foremost, which will separately pay a $200,000 civil penalty, Miller will pay almost $725,000 in restitution.  CFTC

June 18, 2020

Deutsche Bank AG has agreed to pay over $10 million to settle two enforcement matters with the CFTC.  The first matter, settled for $1.25 million, involved numerous instances of spoofing by two Tokyo-based traders of Deutsche Bank Securities Inc. in 2013.  The second matter involved a swap reporting platform outage in 2016 that prevented Deutsche Bank from reporting swap data for five full days, exacerbated existing reporting problems, and ultimately caused new reporting problems, including some that violated a 2015 CFTC order.  To settle that matter, Deutsche Bank will pay $9 million, as well as undergo compliance monitoring.  CFTC

June 9, 2020

An unnamed whistleblower has been awarded $6 million for providing what the CFTC called specific, credible, and timely information that ultimately led to a successful enforcement action.  Since the agency’s whistleblower program was started in 2014, the CFTC has recovered nearly $900 million through whistleblower tips, and has awarded over $110 million to the whistleblowers involved with those recoveries.  CFTC

February 21, 2020

Husam Tayeh of Illinois and his Nevada corporations, Dinar Corps., Inc. and My Monex, Inc., have agreed to pay the CFTC more than $22.6 million in disgorgement and civil monetary penalties after being found liable for violations of the Commodity Exchange Act arising from defendants’ alleged registration violations, misappropriation of investor funds, and fraudulent solicitation of customers to engage in financed retail forex transactions involving Iraqi Dinar and Vietnamese Dong.  To settle a related criminal action, Tayeh has been sentenced to 1 year in prison, ordered to forfeit more than $8 million, and ordered to pay more than $150,000 in restitution to victims.  CFTC
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