CFTC Sanctions Velocity Futures, LLC, for Supervision Violations (Press Release Order)

CFTC Press Release 6138-11

Order

The CFTC announced the settlement of charges against Velocity Futures, LLC, a registered FCM, for failing to supervise diligently the handling of its customer accounts. The CFTC Order finds that from July 2003 until at least December 2007, Houston-based Velocity failed to develop and implement an adequate system to monitor the trading of customer accounts by third parties and protect customers against potential account churning. In addition, the CFTC further finds that Velocity failed to conduct a diligent background check on Norbert Grupe, the principal of El Toro Consult SL, a foreign IB and CTA, even though Velocity was aware of his potential criminal background. Grupe was, in fact, the convicted felon and a fugitive from the Florida Department of Corrections.

The Order imposes an $180,000 civil monetary penalty and cease and desist order on Velocity and requires that the firm undertake new supervisory procedures.

Cross References: CFTC Rule 166.3