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News

RELEASE Number

8104-19

https://www.cftc.gov/PressRoom/PressReleases/8104-19?utm_source=govdelivery

January 13, 2020

CFTC Orders South Korean Company to Pay $700,000 for Spoofing

Washington, DC – The Commodity Futures Trading Commission today issued an order simultaneously filing and settling charges against Mirae Asset Daewoo Co., Ltd. for spoofing in the Chicago Mercantile Exchange (CME) E-mini S&P 500 futures market.  The order finds that Daewoo Securities Co. Ltd.—a company Mirae acquired following the spoofing conduct at issue—engaged in the spoofing through a trader located in Daewoo’s Seoul office. The order requires Mirae to pay a $700,000 civil monetary penalty and to cease and desist from violating the Commodity Exchange Act’s prohibition on spoofing.

“This enforcement action demonstrates, once again, that the Commission will hold overseas entities that spoof in our markets accountable,” said CFTC Director of Enforcement James McDonald.

The order finds that from December 2014 to April 2016, the Daewoo Securities trader placed numerous orders for the E-mini contract with the intent to cancel those orders before execution.  One strategy the trader employed involved three steps.  First, the trader entered one or more disproportionally large orders—which he intended to cancel—on one side of the market (the spoof orders).  The trader placed the spoof orders with the intention of giving a misleading impression of market depth and inducing other market participants to trade opposite the orders.  Second, capitalizing on the increased buying or selling interest that the spoof orders created, the trader placed a small order—which he intended to execute—on the opposite side of the market (the genuine order).  Third, within seconds of the genuine order being filled, the trader cancelled the spoof order before it was executed.

The order recognizes Mirae’s cooperation, which expedited the resolution of this matter, in the form of a reduced civil monetary penalty.

The CFTC thanks and acknowledges the assistance of the CME Group Inc. in this matter.  The CFTC also thanks and acknowledges the assistance of the Financial Services Commission of the Republic of Korea and the United Kingdom Financial Conduct Authority.

The Division of Enforcement staff members responsible for this case are Jonah E. McCarthy, Jennifer L. Blakley, Dmitriy Vilenskiy, A. Daniel Ullman II, Christine Ryall, and Paul G. Hayeck.

-CFTC-

 

RELEASE Number

8103-20

https://www.cftc.gov/PressRoom/PressReleases/8103-20

January 10, 2020

CFTC Charges US Coin Bullion LLC and its Owners with $7.9 Million Precious Metals Fraud

Washington, DC – The U.S. Commodity Futures Trading Commission today announced it filed a civil enforcement action on January 8th in the U.S. District Court for the Middle District of Florida, charging US Coin Bullion LLC, Salvatore Esposito, and Joseph Esposito with misappropriating over $7.9 million of customer funds, as well as engaging in fraudulent solicitations in connection with the purported purchase of precious metals.

“As this case shows, the CFTC is actively policing precious metals transactions and will vigorously enforce the anti-fraud provisions of the Commodity Exchange Act,” said CFTC Director of Enforcement James McDonald. “As I have said many times, working in parallel with our law enforcement partners is an extremely effective way to prosecute wrongdoers and send a message to potential wrongdoers that their fraudulent conduct will result in significant consequences.”

The complaint seeks an order that permanently bans the defendants from registering with the CFTC and trading in any CFTC-regulated markets, as well as restitution and disgorgement.

The complaint alleges that from at least 2012 through July 2019, the defendants received over $7.9 million from at least 120 customers for the purpose of investing in precious metals. Instead of making these purchases, the defendants misappropriated the entire amount to pay for personal and business expenses, diverted funds invested by new customers to make Ponzi scheme-like payments to earlier customers who requested account withdrawals, and used customer funds to trade leveraged precious metals in US Coin accounts at precious metals dealers. The complaint alleges that, in order to conceal their fraud, the defendants provided customers with account statements falsely representing ownership of specific amounts of precious metals purchased at particular prices.

Related Criminal Action

On September 20, 2019, the U.S. Attorney’s Office for the Middle District of Florida announced a separate criminal action against Salvatore and Joseph Esposito [See United States v. Esposito, No. 6:19-cr-00208-CEM-DCI (M.D. Fla.)]  Each individual pleaded guilty to one count of wire fraud and agreed to pay restitution to victims of their fraud.  Victims of US Coin’s and the Espositos’ fraud can find further information by sending an email to: USCB-Victims@usss.dhs.gov.

The CFTC thanks the U.S. Attorney’s Office of the Middle District of Florida, Orlando Division, the U.S. Secret Service Orlando Field Office, and the U.S. Secret Service Central Florida Task Force for their assistance in pursuing this matter.

The Division of Enforcement staff members responsible for this case are Eugenia Vroustouris, Michael Loconte, Erica Bodin, Aimée Latimer-Zayets, and Rick Glaser.

*  *  *  *  *  *  *

CFTC’s Precious Metals Customer Fraud Advisory

The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Precious Metals Fraud Advisory, which alerts customers to precious metals fraud and lists simple ways to spot precious metals scams.

The CFTC strongly urges the public to verify a company’s registration with the CFTC before committing funds.  If unregistered, a customer should be wary of providing funds to that company. A company’s registration status can be found using NFA BASIC.

Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382) or by filing a tip or complaint online.

-CFTC-

 

RELEASE Number

8102-19

https://www.cftc.gov/PressRoom/PressReleases/8102-19

January 10, 2020

CFTC Obtains $2.5 Million Judgment for Fraudulent Solicitation and Misappropriation of Funds From Commodity Pool Participants

Washington, DC – The U.S. Commodity Futures Trading Commission today announced the U.S. District Court for the Northern District of Illinois entered a Consent Order for Permanent Injunction on January 8th against defendant Richard D. Carter of Illinois in connection with a $1.76 million commodity pool fraud operated by Blue Guru, LLC.

The order requires Carter to pay restitution totaling $838,642 and a civil monetary penalty of $1,760,022. The order also imposes permanent trading and registration bans on Carter and prohibits him from violating provisions of the Commodity Exchange Act as charged. The order stems from a CFTC Complaint filed on January 12, 2018 [CFTC Press Release 7672-18], which charged Carter, co-defendant Mark R. Slobodnik, and Blue Guru, LLC with fraud, misappropriation, and failing to register with the CFTC.

The order finds that from April 2014 to January 2018, Carter willfully misrepresented material facts to Blue Guru pool participants and prospective pool participants concerning the profitability of their participation interests in the commodity pool. Among other misrepresentations, Carter stated that pool funds would be used to trade futures, including the Dow Jones E-mini and the S&P 500 E-mini contracts on the CME, when, in fact, defendants used less than two-thirds of the $1.76 million they received for trading. According to the order, Carter informed prospective participants that they would earn 8% per year on their investment plus 50% of any gross net trading profits, and he issued false account statements reflecting illusory quarterly gains. In reality, Blue Guru incurred more than $500,000 in trading losses, half of which Carter directly caused.

The order also finds that Carter misappropriated $586,674 of participants’ funds, ignored withdrawal requests, and lied about conditions that purportedly prevented defendants from making disbursements.

On November 13, 2018, the court entered a consent order of permanent injunction against defendant Slobodnik, requiring him to pay restitution of $280,000, disgorgement of $45,342, and a civil monetary penalty of $45,342. On May 1, 2018, a default judgment was entered against defendant Blue Guru, ordering it to pay restitution of $1,400,076, disgorgement of $1,400,076, and a civil monetary penalty of $4,200,230.

On August 27, 2019, Carter pleaded guilty to wire fraud in a related criminal proceeding and is scheduled to be sentenced on February 13, 2020.  United States v. Carter, Case No. 1:18-cr-00154 (N.D. Ill. filed May 10, 2018).

The CFTC cautions that orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure that wrongdoers are held accountable.

The CFTC thanks the U.S. Attorney’s Office for the Northern District of Illinois and the Federal Bureau of Investigation for their assistance.

The Division of Enforcement staff members responsible for this action are Susan Gradman, Joseph Patrick, Brigitte Weyls and, Scott Williamson.

* * * * * *

CFTC’s Commodity Pool Fraud Advisory

The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Commodity Pool Fraud Advisory, which warns customers about a type of fraud that involves individuals and firms, often unregistered, offering investments in commodity pools.

Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.

-CFTC-

 

RELEASE Number

8101-20

https://www.cftc.gov/PressRoom/PressReleases/8101-20

January 10, 2020

CFTC Commissioner Stump Announces Members of the Global Markets Advisory Committee’s New Subcommittee on Margin Requirements for Non-Cleared Swaps

Washington, DC — U.S. Commodity Futures Trading Commission Commissioner Dawn D. Stump today announced the members of the Subcommittee on Margin Requirements for Non-Cleared Swaps (Margin Subcommittee), a new subcommittee of the CFTC’s Global Markets Advisory Committee (GMAC).

The Margin Subcommittee was established to consider issues raised by the implementation of margin requirements for non-cleared swaps, to identify challenges associated with forthcoming implementation phases, and to make recommendations via a report for the GMAC to consider in advising the Commission.

“As we prepare for the final stage of global margin implementation we should reflect on lessons learned to date while also recognizing the unique complexities presented by the final phase,” said Commissioner Stump, the sponsor of GMAC. “I am confident that the expertise of the newly formed Margin Subcommittee will prove valuable to the Global Markets Advisory Committee and ultimately the Commission. I look forward to joining the members of this subcommittee in kicking off their organizational meeting on Monday, January 13.”

The CFTC sought nominations for the Margin Subcommittee by Federal Register Notice dated October 28, 2019.  Of the highly qualified nominations received in response to the notice, Ms. Wendy Yun, Co-chair of the Derivatives Committee of the Securities Industry and Financial Markets Association (SIFMA) Asset Management Group, was selected to chair the 14-member subcommittee. The Margin Subcommittee is comprised of a wide range of industry participants that have a high-level of expertise in, and experience with, margin requirements for non-cleared swaps and the impact of the requirements on the marketplace and market participants.

See full list of the GMAC Subcommittee on Margin Requirements for Non-Cleared Swaps here and under Related Links.

-CFTC-

RELATED LINKS

GMAC Subcommittee on Margin Requirements for Non-Cleared Swaps

 

RELEASE Number

8100-20

https://www.cftc.gov/PressRoom/PressReleases/8100-20

January 8, 2020

CFTC’s Division of Market Oversight Supplements No-Action Relief to SEFs and DCMs from Certain CFTC Regulations for Correction of Errors

Washington, DC — The U.S. Commodity Futures Trading Commission’s Division of Market Oversight today announced that it has issued a no-action letter supplementing the relief provided in CFTC Letter 17-27 [See CFTC Press Release No. 7563-17], which provided relief from certain CFTC regulations to permit swap execution facilities (SEFs) and designated contract markets (DCMs) to correct clerical or operational errors discovered after a swap has been cleared.

Specifically, this no-action letter provides an alternative error correction process by which SEFs and DCMs may permit counterparties to determine that an error has occurred and correct the error, subject to ex post facto review by the SEF or DCM. The relief is subject to the terms and conditions in the letter. In addition, this letter supplements, and does not replace, CFTC Letter 17-27. SEFs and DCMs may continue to implement a trade correction policy pursuant to CFTC Letter 17-27 and its original conditions.

Consistent with CFTC Letter 17-27, this relief will expire on the effective date of revised CFTC regulations that establish a permanent, practicable solution for swaps with operational or clerical errors executed on a SEF or DCM.

-CFTC-

 

RELEASE Number

8100-20

https://www.cftc.gov/PressRoom/PressReleases/8100-20?utm_source=govdelivery

January 8, 2020

CFTC’s Division of Market Oversight Supplements No-Action Relief to SEFs and DCMs from Certain CFTC Regulations for Correction of Errors

Washington, DC — The U.S. Commodity Futures Trading Commission’s Division of Market Oversight today announced that it has issued a no-action letter supplementing the relief provided in CFTC Letter 17-27 [See CFTC Press Release No. 7563-17], which provided relief from certain CFTC regulations to permit swap execution facilities (SEFs) and designated contract markets (DCMs) to correct clerical or operational errors discovered after a swap has been cleared.

Specifically, this no-action letter provides an alternative error correction process by which SEFs and DCMs may permit counterparties to determine that an error has occurred and correct the error, subject to ex post facto review by the SEF or DCM. The relief is subject to the terms and conditions in the letter. In addition, this letter supplements, and does not replace, CFTC Letter 17-27. SEFs and DCMs may continue to implement a trade correction policy pursuant to CFTC Letter 17-27 and its original conditions.

Consistent with CFTC Letter 17-27, this relief will expire on the effective date of revised CFTC regulations that establish a permanent, practicable solution for swaps with operational or clerical errors executed on a SEF or DCM.

-CFTC-

 

SPEECHES & TESTIMONY

January 3, 2020

https://www.cftc.gov/PressRoom/SpeechesTestimony/dsio120419advstatement010220?utm_source=govdelivery

Statement of Division of Swap Dealer and Intermediary Oversight on Annual Compliance Report Requirements

Washington, DC — On December 4, 2019, the Division of Swap Dealer and Intermediary Oversight (DSIO) issued an advisory regarding annual compliance report requirements for swap dealers, futures commission merchants, and major swap participants (Advisory).[1] The Advisory clarifies annual compliance reporting requirements for those categories of registered firms and provides additional recommendations to those firms regarding the manner in which they prepare their reports. DSIO intends the Advisory to help registrants improve the quality and usefulness of their reports in accordance with their existing obligations under CFTC Regulation 3.3.[2]

DSIO considers the Advisory to be targeted in scope and to reflect certain iterations in its thinking about how annual compliance reports can be more effective, based on its years of experience in reviewing reports submitted by registered firms. At the same time, DSIO is aware that having issued the Advisory in December may present challenges for chief compliance officers (CCOs) of registered firms to adapt their existing reporting procedures in time to produce reports in 2020 that take the Advisory into full consideration.

The Advisory is merely guidance and does not impose any new requirements. As such, DSIO expects that CCOs will take reasonable measures to implement the Advisory’s recommendations when preparing their annual compliance reports for 2019. DSIO recognizes that CCOs may not be able to implement those recommendations fully for their 2019 reports given the potential timing constraints identified above. DSIO does expect, however, that CCOs will be able to consider those recommendations more completely when preparing their 2020 annual reports, which will be due in 2021.

Any questions regarding this statement should be directed to the following DSIO Staff members: Amanda Olear, Acting Deputy Director (202.418.5283, aolear@cftc.gov); Pamela Geraghty, Special Counsel (202.418.5634, pgeraghty@cftc.gov); and Owen Kopon, Special Counsel (202.418.5360, okopon@cftc.gov).

Joshua B. Sterling
Director
Division of Swap Dealer and Intermediary Oversight

[1] https://www.cftc.gov/csl/19-24/download; see also https://www.cftc.gov/PressRoom/PressReleases/8090-19.

[2] 17 C.F.R. § 3.3.

 

One Response to “News”

  1. Спасибо за информацию!!!!!

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