CFTC Fines Risk Management Firm for Acting as an Unregistered CTA

The CFTC entered an Order against Summit Energy Services, Inc. for acting as an unregistered Community Trading Advisor ("CTA").

The CFTC found that, from at least October 2012 to September 25, 2014, Summit Energy, for compensation or profit, engaged in the business of advising more than 15 clients as to the value of or the advisability of trading in futures contracts and over-the-counter ("OTC") natural gas swaps and held itself out generally to the public as a CTA, without being registered as such with the CFTC.

The CFTC Order further found that Summit Energy, through its website and public brochures, offered prospective clients "risk management" services, which included advising clients as to the value of or the advisability of trading in natural gas swaps and futures. Also according to the Order, Summit Energy acted as a broker in OTC natural gas swaps transactions with respect to some of its clients and that Summit Energy's commodity trading advice was not solely incidental to its business, but rather was an "integral part of the services" it provided to its clients.

See: CFTC Order; CFTC Press Release.