CFTC Fines Minneapolis Futures Broker $100,000 for Fraudulent Misconduct

The Commodity Futures Trading Commission (CFTC CFTC The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss Read this Term) announced on Friday that it has charged futures broker, Christian Robert Mayer with engaging in a fraudulent trading scheme. As a result, Mayer will have to pay a $100,00 civil monetary penalty.

In addition, the US regulator has also placed permanent trading and registration bans on Mayer. The CFTC has charged him with violating the Commodity Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Act and has ordered him to cease from further violations.

Mayer was a registered Associated Person of a Minneapolis Commodity Trading Advisor and Introducing Broker (IB). Between October 29, 2014, and September 28, 2016, he was found to be engaged in a fraudulent trading scheme which involved unauthorized trades in cattle, crude oil, and wheat futures contracts.

Mayer’s tactics

After making said trades, Mayer would then transfer the profitable trades to his own account, while leaving the losing trades in the client’s accounts. Then, he would log onto the online portal of the Futures Commission Merchant that carried all the accounts and report that the reason for the trade transfer request was because he had placed the trade in the wrong account.

According to the statement from the commodities watchdog, when the IB realized what Mayer was doing, it reacted immediately and refunded the defrauded customers up to $105,090 in total. This amount is the total of losing trades Mayer left in the affected customers’ accounts and the profitable trades that he transferred into his own account.

Commenting on the fine and order, James McDonald, Director of the CFTC’s Division of Enforcement, said: “Introducing Brokers serve an important role in connecting customers to our futures markets. But these customers are entitled to trust that the brokers will handle their trades honestly. When the brokers do not—but instead defraud their own customers as respondent did here—the Commission will vigorously pursue that misconduct.”