A registered futures commission merchant ("FCM") settled CFTC charges for engaging in
prohibited noncompetitive, fictitious wash sales. The CFTC found
that the conduct resulted in "hundreds" of trades in
violation of CFTC regulations.
According to the CFTC, the FCM engaged in approximately 385
noncompetitive, fictitious and wash sales involving Exchange for
Physical (or "EFP") transactions. The CFTC found that 217
of the transactions took place post-entry of a Consent Order,
resolving a CFTC enforcement action against the FCM's parent
company for wash and fictitious transactions.
The CFTC stated that the FCM's failure to fulfill its
supervisory requirements resulted in further violations of CFTC
rules through its failure to (i) file quarterly Risk Exposure
Reports in a timely manner, (ii) accurately state the
"effectiveness" of its Risk Management Program in its
Chief Compliance Officer Reports and (iii) update and maintain
required records.
