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ARTICLE · 14 JULY 2017

Firm Settles CFTC "Wash-Trading" Charges

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Proprietary trading firm Rosenthal Collins Capital Markets, LLC ("RCCM") and former RCCM trader Brandon Elsasser agreed to settle CFTC charges that they engaged in illegal "wash sales."

United StatesFinance and Banking
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Proprietary trading firm Rosenthal Collins Capital Markets, LLC ("RCCM") and former RCCM trader Brandon Elsasser agreed to settle CFTC charges that they engaged in illegal "wash sales."

In an Order, the CFTC alleged that RCCM traders used "wash-trading" strategies in order to generate rebates from the Chicago Mercantile Exchange market-maker program. The CFTC alleged that:

  • one RCCM trader took advantage of a flaw in the "wash-blocking system" by trading against himself and generating rebates; and
  • two RCCM traders would enter single lot orders for illiquid products back and forth at the same prices in short periods of time in order to generate rebates.

Overall, the CFTC contended, RCCM earned rebates on approximately 300,000 Eurodollar contracts through more than 8,000 wash transactions while trading.

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