FCM Settles CFTC Charges Of Supervisory Failures

A futures commission merchant ("FCM"), R.J. O'Brien & Associates LLC, settled CFTC charges of failing to supervise an employee's handling of customer accounts and of failing to comply with a prior Order.

As set out in the present CFTC Order, one of the FCM's clients used the FCM's electronic trading platform to execute bunched orders on behalf of the client's customer and proprietary accounts. The client then allocated the most profitable trades to its own accounts while allocating losing or less profitable trades to customer accounts. The CFTC found that the FCM had ignored red flags and otherwise failed to diligently supervise its employees to ensure that bunched orders were allocated properly.