Fraud in CFTC-Regulated Markets
This archive displays posts tagged as relevant to fraud in markets regulated by the Commodity Futures Trading Commission, the CFTC, or governed by the Commodity Exchange Act, the CEA. You may also be interested in the following pages:
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.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. CFTCNovember 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. CFTCNovember 17, 2016
U.K. resident Navinder Singh Sarao was ordered to pay over $38 million in sanctions and disgorgement to settle allegations that he unlawfully manipulated trading of the E-mini S&P near month futures contract, including on the Flash Crash Day. CFTCOctober 13, 2016
New York-based Forcerank LLC will pay a $50,000 penalty for illegally offering complex derivatives products to retail investors through mobile phone games described as “fantasy sports for stocks.” According to the SEC’s order, Forcerank ran mobile phone games where players predicted the order in which 10 securities would perform relative to each other. Players won points and some received cash prizes based on the accuracy of their predictions. Forecerank kept 10% of the entry fees and maintained a data set about market expectations it hoped to sell to hedge funds. Forerank’s agreements with players were security-based swaps because they provided for a payment that was dependent on an event associated with a potential financial, economic, or commercial consequence and based on the value of individual securities. An SEC investigation found that Forcerank failed to file a registration for what constituted a security-based swap offering and failed to sell the contracts through a national securities exchange. Both are requirements under the Dodd-Frank Act to ensure information about an offering is fully transparent to retail investors and the transactions are limited to platforms subject to the highest level of regulation. SECFinancial Spoofs No Laughing Matter: Chicago Speed-Chess Champ Can’t Outmaneuver CFTC
Posted 10/24/16
By the C|C Whistleblower Lawyer Team
Although some take issue with cheeky parody, most of us love a good spoof. Unless, that is, the spoof is the sort that lands you in hot water with financial regulators. Chicago-based trader and speed-chess champ Igor Oystacher and his firm, 3Red Trading LLC, found out the hard way that spoofing, at least in financial industry jargon, is no laughing matter. Indeed, financial...