CFTC Fines Two Dubai Residents $100K for Wash Trading

The US Commodity Futures Trading Commission (CFTC) announced on Monday that it has imposed a $100,000 civil monetary penalty on two Dubai residents, Kunal Bansal and Vinit Agarwal, and their Hong Kong and Dubai based firms Aralia Securities and Vintage Bullion DMCC, respectively. They were accused of indulging in wash trading and non-competitive transactions.

Bansal and Agarwal executed a total of 13 wash trades consisting of 189 gold futures contracts on behalf of their companies.

A Co-ordinated Effort

The official announcement detailed that Bansal directed Agarwal on or about April 14, 2020, to enter a selling order for Vintage for 250 gold futures contracts traded on COMEX. They carefully coordinated the timing of the order as Bansal entered off-setting orders at the same time to purchase the same quantity of gold futures at the same price.

Though at one instance there was a mismatch in the bids of the two, Agarwal quickly lowered his bid to match the order.
Wash trading allows companies to execute false trades and show inflated demand for their products. The investigation against Bansal and Agarwal and their companies were conducted by the CFTC along with the CME Group.

The fine imposed was combined for the two individuals and their companies, which has already been settled. However, Bansal and Agarwal were slapped with a cease and desist order to prevent them from further violations of the US securities market laws.

Additionally, the CME Group, which operates one of the largest derivatives exchanges in the US, imposed a notice of disciplinary action and a 10-day suspension on both individuals. Furthermore, it ordered Bansal and Agarwal to pay $25,000 and $10,000 in fine, respectively.