CFTC accuses trader of misappropriation of commercial information

United States: CFTC accuses trader of misappropriation of commercial information

To print this article, simply register or connect to

CFTC accused a Puerto Rican resident and his company trading material non-public information on gas futures contracts received from an insider of an energy company.

In a complaint filed with the United States District Court for the Southern District of Texas, the CFTC said that between August 2015 and December 2018, the individual received confidential information about the block trade from a merchant. of an energy company through a ‘failover chain’, then (i) executed fictitious and arm’s length block trades on the specified gas futures contracts and (ii) entered into corresponding transactions for natural gas futures contracts physically delivered for the same quantity and the same contract month. The CFTC alleged that as a result of the prohibited trade, the individual generated more than $ 1.5 million in profits.

The CFTC accuses the individual and the company of having violated the provisions of sections 4c of the CEA (“Prohibited Transactions”) and 6 (c) (“Prohibition on manipulation and false information”) and rule 180.1 of the CFTC (“Prohibition of use or attempted use of manipulative and deceptive devices”).

The CFTC is asking for (i) permanent injunctions, (ii) restitution and restitution, and (iii) civil financial penalties.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

POPULAR ARTICLES ON: United States Finance and Banking

Tax aspects of litigation financing

Cadwalader, Wickersham & Taft LLP

Be sure to tune in to our next podcast, “Tax Aspects of Litigation Finance” on Wednesday December 8th. Mark Howe and Phil Balzafiore, partner of Cadwalader, …

Michael J. Birnbaum