Fraud in CFTC-Regulated Markets Archives - Page 9 of 44

July 12, 2021

A non-bank institution in Georgia called GreenSky, LLC has been ordered to refund or cancel up to $9 million in fraudulent loans, pay a $2.5 million civil penalty, and implement new procedures to prevent future financial abuse. According to the CFTC, GreenSky’s inappropriate and ineffective controls enabled third-party merchants to take out loans on behalf of thousands of consumers without their knowledge or authorization. In addition to the financial resolution, GreenSky is now required to verify consumer identities and confirm authorizations before activating or disbursing loans, implement a consumer complaint management program, and properly oversee third-party merchant partners. CFTC

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

June 25, 2021

Three Credit Suisse entities—Credit Suisse International, Credit Suisse Securities Europe Limited, and Credit Suisse Capital LLC—have been ordered to pay a $1.5 million civil monetary penalty to resolve charges of failing to comply with swap data reporting obligations between 2013 and 2018. Specifically, the entities reported the mark-to market notational value of underlying equity rather than the daily mark of certain equity swap transactions. The failure resulted in errors in the majority of the reportable equity swap transactions submitted to the swap dealer repository. CFTC

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

June 3, 2021

The CFTC obtained a default judgment against Florida resident James Frederick Walsh, who was ordered to pay a penalty of more than $500,000. Walsh, who was not registered with the CFTC, marketed himself through social media as an experienced foreign exchange trader who could conduct retail forex trades for customers. Walsh advertised that the COVID-19 pandemic created an opportunity for increased forex trading profits, guaranteed returns, and claimed to have inside information about forex markets. CFTC

Tagged in: COVID-19, Foreign Exchange, Fraud in CFTC-Regulated Markets, Misrepresentations,

How will regulators respond to Bitcoin’s price fluctuations?

Posted 05/18/21

The price of Bitcoin—never stable—has become even more erratic in the last month. From April 17 to May 17, the price fell 26%. Such a huge drop would be noteworthy in a stock investment. But in something claiming to be a currency, that kind of instability is normally only seen in times of crisis and hyperinflation. Coming just as cryptocurrencies are making a play to be considered mainstream, this latest...

Tagged in: Cryptocurrency, Financial and Investment Fraud, Fraud in CFTC-Regulated Markets, Insider Trading, Market Manipulation and Trading Violations, Ponzi Schemes, Securities Fraud,

May 14, 2021

A consent order was entered against Leonard Cipolla, who fraudulently solicited individuals for a commodity pool operated by his company Tate Street Trading. Cipolla received over $7 million from pool participants and misappropriated more than $5 million of it. The order requires Cipolla to pay restitution of $5.1 million. CFTC (see criminal sentencing)

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

CFTC Whistleblower Program Faces Challenges of its Success: What Whistleblowers Should Know

Posted 05/11/21

Screenshot of CFTC Whistleblower Program web page

In May, 2021, the Wall Street Journal reported (paywall) on “turmoil” in the CFTC Whistleblower Program. According to the article, the CFTC has under consideration a whistleblower award based on a claim by a whistleblower in the 2015 $2.5 billion Deutsche Bank LIBOR manipulation settlement. Given the size of the Deutsche Bank settlement, the potential whistleblower award is substantial: the Journal reports that...

Tagged in: CFTC Whistleblower Reward Program, Financial and Investment Fraud, Fraud in CFTC-Regulated Markets, Importance of Whistleblowers,

CFTC: Looking for a Few Good Whistleblowers

Posted 05/7/21

When it comes to their respective whistleblower programs, the Commodity Futures Trading Commission (CFTC) does not get the same respect or attention the Securities and Exchange Commission (SEC) does. That is largely because the SEC Whistleblower Program has been an unparalleled success, with whistleblower awards being made (and highly promoted) virtually every week or two. Last year was a record-breaking year for...

Tagged in: CFTC Whistleblower Reward Program, Fraud in CFTC-Regulated Markets, Importance of Whistleblowers, Whistleblower Eligibility,

April 27, 2021

The owner of BMC Worldwide, Inc., which did business as Blue Moon Coins, Aaron Michael Scott, has agreed to an order for restitution of $1.4 million to customers who sent him funds for the purpose of purchasing gold and silver based on his false representations that he and BMC were a successful precious metals firm with an inventory of precious metals. In fact, the defendants had no such inventory, and misappropriated customer funds for their own purposes. Scott previously pleaded guilty to wire fraud and was sentenced to four years in prison. CFTC

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

April 23, 2021

The CFTC has awarded approximately $3 million to a whistleblower whose tip launched an investigation and helped bring about a successful enforcement action. This award brings the total amount of monetary sanctions resulting from whistleblower tips to over $1 billion. CFTC

Tagged in: Anonymity, CFTC Whistleblower Reward Program, Financial and Investment Fraud, Fraud in CFTC-Regulated Markets, Whistleblower Rewards,

April 9, 2021

The Alista Group, LLC, and Luis M. Pineda Palacios, a/k/a Luis Pineda, have been ordered to pay civil monetary penalties and restitution in an action initiated by the CFTC alleging that they engaged in precious metals fraud and illegal, off-exchange precious metals sales to retail customers. In addition, the government alleged that defendants misappropriated customer funds to trade on their own account, pay business expenses, and make payments to customers to sought to cash out. Alista was ordered to pay a total of $2.2 million, and Pineda was ordered to pay $448,000. CFTC

Tagged in: Financial and Investment Fraud, Fraud in CFTC-Regulated Markets, Ponzi Schemes, Regulatory Violations,

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