Commodity brokerage firms need to be vigilant as the
CFTC signals increased policing and prosecution of insider
trading.
The Commodity Futures Trading Commission ("CFTC")
filed a complaint on September 28, 2018, in the U.S. District Court
for the Southern District of New York against the commodities
brokerage firm EOX Holdings LLC ("EOX") and one of its
brokers, Andrew Gizienski, alleging that the defendants violated
Section 6(c)(1) of the Commodity Exchange Act ("CEA") and
Regulation 180.1(a) promulgated thereunder. In particular, the CFTC
alleged that in an effort to curry favor with a longstanding friend
and customer ("Customer A"), Gizienski used material,
nonpublic information he learned about the trading activities of
other EOX clients to trade on Customer A's behalf. Simultaneous
with the filing of its complaint against EOX and Gizienski, the
CFTC announced that it had formed an Insider Trading and
Information Protection Task Force ("Task Force"), which
has
