CFTC Levies Fines for Wash Sales

The CFTC ordered two individuals and their affiliated firms to pay civil monetary penalties for alleged wash sales and noncompetitive trades.

The CFTC alleged that the two individuals intentionally entered into offsetting orders on the same gold futures contracts, and determined that one of the individuals was a beneficial owner of both relevant trading accounts. The CFTC found the individuals to be in violation of the wash sale prohibitions, specifically (i) CEA Section 4c(a)(1) and CEA Section 4c(a)(2) ("Prohibited Transactions"), and (ii) CFTC Rule 1.38(a) ("Execution of Transactions"). The firms were found liable for the violations of their agents under CEA Section 2(a)(1)(B) and CFTC Rule 1.2 ("Liability of Principal for Act of Agent").

The Order stipulated that the respondents (i) pay a $100,000 civil monetary penalty, jointly and severally, and (ii) cease and desist their violative conduct.

The release noted that the investigation was done alongside an inquiry by the CME Group, which issued its own suspensions and fines for the individuals.