Farming Consultant Settles CFTC Charges for CTA Registration Violations

A consultant, who provided commodity futures hedging advice to clients related to their crop production, settled CFTC charges for failing to register as a Commodity Trading Advisor.

The CFTC found that during the relevant period, the individual "held himself out generally to clients and potential clients as a CTA" and provided commodity trading advice to more than fifteen persons within a twelve-month period. The Order added that the individual assisted in the account opening process for clients with a registered Futures Commission Merchant and placed orders for futures contracts on behalf of clients without possessing the necessary authorization, such as a power of attorney.

The CFTC found that the consultant violated CEA Section 4m(1) ("Use of mails or other means or instrumentalities of interstate commerce by commodity trading advisors and commodity pool operators").

To settle the charges, the consultant agreed to (i) cease and desist from violating Section 4m(1) of the CEA and (ii) pay a $75,000 civil monetary penalty.