CFTC Welcomes 2013 – RJ O'Brien Fined
The US Commodity Futures Trading Commission started 2013 by giving R.J O'Brien & Associates a fine for failing to supervise the proceedings of an introducing broker. The US futures market has faced immense pressure after the major debacle of MF Global and PFG Best.
The U.S. Commodity Futures Trading Commission (CFTC) issued an order filing and settling charges against R.J. O’Brien & Associates LLC (RJO), of Chicago, IL., a registered Futures Commission Merchant, for failing to diligently supervise its employees in connection with the handling of commodity futures orders of a Guaranteed Introducing Broker (GIB) of RJO and the GIB’s Associated Person (AP), sole principal, and owner.
The CFTC order finds that, from at least January 2003 through February 2007, the GIB’s AP engaged in an unlawful trade allocation scheme for his personal benefit and to the detriment of both the GIB’s customers and a commodity futures pool operated by the AP through accounts held at RJO. The AP was able to allocate trades post-Execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Read this Term, allocating the more profitable trades to his personal accounts, and the unprofitable, or less profitable trades to either the GIB customer accounts or the pool account, the order finds. The GIB’s and AP’s customers sustained losses of up to $183,000, according to the order.
In addition, RJO failed to follow procedures it had in place concerning the placement of bunched orders by account managers, the order finds. For example, RJO failed to ensure that it always received a post-allocation plan prior to, or contemporaneously with, the GIB’s AP’s filing of bunched orders. The order also finds that RJO did not employ adequate procedures to monitor, detect, and deter unusual activity concerning trades that were allocated post-execution, or for supervision of its employees’ handling and processing of bunched orders. By such acts, RJO failed to diligently supervise the handling of customer orders in violation of CFTC Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term 166.3, 17 C.F.R. § 166.3 (2011).
The CFTC order imposes a $300,000 civil monetary penalty and requires RJO to cease and desist from further violations of CFTC regulation 166.3, as charged.
The US Commodity Futures Trading Commission started 2013 by giving R.J O'Brien & Associates a fine for failing to supervise the proceedings of an introducing broker. The US futures market has faced immense pressure after the major debacle of MF Global and PFG Best.
The U.S. Commodity Futures Trading Commission (CFTC) issued an order filing and settling charges against R.J. O’Brien & Associates LLC (RJO), of Chicago, IL., a registered Futures Commission Merchant, for failing to diligently supervise its employees in connection with the handling of commodity futures orders of a Guaranteed Introducing Broker (GIB) of RJO and the GIB’s Associated Person (AP), sole principal, and owner.
The CFTC order finds that, from at least January 2003 through February 2007, the GIB’s AP engaged in an unlawful trade allocation scheme for his personal benefit and to the detriment of both the GIB’s customers and a commodity futures pool operated by the AP through accounts held at RJO. The AP was able to allocate trades post-Execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Read this Term, allocating the more profitable trades to his personal accounts, and the unprofitable, or less profitable trades to either the GIB customer accounts or the pool account, the order finds. The GIB’s and AP’s customers sustained losses of up to $183,000, according to the order.
In addition, RJO failed to follow procedures it had in place concerning the placement of bunched orders by account managers, the order finds. For example, RJO failed to ensure that it always received a post-allocation plan prior to, or contemporaneously with, the GIB’s AP’s filing of bunched orders. The order also finds that RJO did not employ adequate procedures to monitor, detect, and deter unusual activity concerning trades that were allocated post-execution, or for supervision of its employees’ handling and processing of bunched orders. By such acts, RJO failed to diligently supervise the handling of customer orders in violation of CFTC Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term 166.3, 17 C.F.R. § 166.3 (2011).
The CFTC order imposes a $300,000 civil monetary penalty and requires RJO to cease and desist from further violations of CFTC regulation 166.3, as charged.