CFTC Charges Interdealer Broker with Communicating Fake Bids and Trades

The CFTC filed charges against an interdealer broker (registered as an introducing broker) (i) for deceiving clients by communicating fake bids and offers and fake trades in the foreign exchange options market and (ii) for supervisory failures. The Chairman of the Board of the interdealer broker agreed to pay $250,000 to settle the CFTC charges for failing to supervise.

According to the Complaint, the purpose of the fictitious quotes and trades, a practice known as "flying prices" and "printing trades," was to give clients a favorable impression of the liquidity on the broker's platform and to induce transactions.

The CFTC is seeking disgorgement of all benefits, a civil monetary penalty, and a permanent injunction restraining and enjoining the parties from further violations.