Sun, 30/01/2011 - 10:37
The US Commodity Futures Trading Commission (CFTC) has fined Andrew W Daniels of Hinsdale, Ill, Edward Taylor of Naperville, Ill, and Daniels Trading Group LLC (DTG) of Chicago, Ill, for violating speculative position limits in the Chicago Board of Trade’s (CBOT) rough rice futures contracts and for willfully concealing material facts from the CME Group, Inc. (CME).
The CFTC order also settles charges against Global Asset Advisors LLC (Global), a Chicago-based introducing broker, and its President Glenn Swanson of Long Grove, Ill, for failing to supervise diligently the handling of trading accounts at Global and traded by Daniels and Taylor.
The CFTC order finds that, from October 2007 through July 2008, Daniels, Taylor and DTG, an unregistered company owned by Daniels, held positions in the CBOT’s rough rice futures contract that should have been aggregated for purposes of conforming to the CBOT’s speculative position limits because they were trading rough rice futures pursuant to private agreements. Their positions, when aggregated, exceeded the CBOT’s single-month speculative position limit of 1,000 contracts on at least 38 trading days, the all-month speculative position limit of 1,000 contracts on at least 42 trading days and the CBOT’s step-down speculative position limit of 200 contracts on at least three of the last five trading days of the July 2008 rough rice contract, in violation of the Commodity Exchange Act (CEA).
The order also finds that Daniels and Taylor hid their trading relationship from the CBOT, a wholly-owned subsidiary of the CME. As a result of Daniels’ and Taylor’s willful concealment of material facts regarding the actual ownership and control of accounts, the CME did not aggregate the rough rice futures and options positions of Daniels, Taylor and DTG for position limit and accountability limit purposes, the order finds.
The order further finds that Global and Swanson failed to diligently supervise the handling of the trading accounts of Daniels, Taylor and DTG by allowing trading accounts introduced by Global and traded by one of its officers to repeatedly exceed the applicable rough rice position limits between October 2007 and July 2008. According to the order, Global and Swanson also allowed Daniels, Taylor and DTG to add rough rice positions to accounts that should have been aggregated after positions in these accounts had exceeded the applicable rough rice position limits and allowed an individual to place trades for an account in another’s name, without a power of attorney authorisation.
The order requires Daniels, Taylor and DTG jointly and severally to pay a USD2 million civil monetary penalty and to cease and desist from the speculative position limit and false reporting violations charged in the order. The order also prohibits Daniels and DTG from owning or trading any rough rice futures or options contracts and Taylor from owning or trading futures or options contracts in any commodity for 11 months. The order requires Global and Swanson jointly and severally to pay a USD200,000 civil monetary penalty and cease and desist from futures supervision violations. It also requires Global to implement strengthened compliance procedures designed to prevent speculative position limit and other violations of federal commodities law and to undertake changes as recommended by a compliance consultant.
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Fri, 28 Aug 2015 00:00:00 GMTInvestment Banking Restructuring Analyst/Associate
Fri, 28 Aug 2015 00:00:00 GMTInvestment Banking Associate (Specialty Finance)
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