CFTC Orders Permanent Injunction against Former Vice President of Trading Firm for Misuse of Customer Funds

The CFTC resolved charges of customer funds segregation violations of CEA of Section 4d(b) ("Dealing by unregistered futures, commission merchants or introducing broker prohibited; duties in handling customer receipts; rules to avoid duplicative regulations") against a trading firm's former vice president for the "misuse" of $562 million in commodity customer-segregated funds.

The CFTC stated that the permanent injunction stemmed from a previous CFTC complaint charging that the accused individual had (i) "improperly commingled and misappropriated customer funds to finance its proprietary trading, (ii) failed to treat and deal with customer funds as belonging to its commodity customers, (iii) withdrawn customer-segregated funds beyond the firm's actual interest therein and (iv) "used the funds to collateralize its overnight loan with the Bank of New York, in violation of Section 4d(b) of the CEA."

See: CFTC Press Release Announcing Senior Vice President's Misuse of Customer Funds; CFTC Order of Injunction.
See also: FBI Press Release.