Cadwalader, Wickersham & Taft LLP
31 December 2021
The CFTC ordered two individuals and their
affiliated firms to pay civil monetary penalties for alleged wash
sales and noncompetitive trades.
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The Order stipulated that the respondents (i) pay a $100,000
civil monetary penalty, jointly and severally, and (ii) cease and
desist their violative conduct.
The CFTC alleged that the two individuals
intentionally entered into offsetting orders on the same gold
futures contracts, and determined that one of the individuals was a
beneficial owner of both relevant trading accounts. The CFTC found
the individuals to be in violation of the wash sale prohibitions,
specifically (i) CEA
Section 4c(a)(1) and CEA
Section 4c(a)(2) (“Prohibited Transactions”),
and (ii) CFTC Rule 1.38(a) (“Execution of
Transactions”). The firms were found liable for the violations
of their agents under CEA
Section 2(a)(1)(B) and CFTC Rule 1.2 (“Liability of
Principal for Act of Agent”).
The release noted that the investigation was done alongside an
inquiry by the CME Group, which issued its own suspensions and
fines for the individuals.
CFTC Press Release: CFTC Orders Dubai Traders and
Their Firms to Pay $100,000 for Wash Sales
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