A commodity trading firm and its principal (and sole owner) settled CFTC charges for engaging in wash sales and non-competitive transactions across multiple futures exchanges owned and operated by the CME Group.
The CFTC charged the registered Commodity Pool Operator and a Commodity Trading Advisor with violations of CEA Section 4c(a)(l) and (2) ("Prohibited Transactions") as well as CFTC Rule 1.38(a) ("Recordkeeping") by entering "bids and offers of similar quantities in the same futures product for trading accounts that had the same beneficial owner and which were intended to and did in fact offset each other upon execution."
To settle the charges, the firm and its principal agreed to cease and desist from further violating the CEA and CFTC Regulations and to pay a civil monetary penalty of $150,000.
In a parallel action, the CME fined the principal $30,000 and suspended him from engaging with any of the CME Group's platforms for 10 business days for his involvement in the wash sales that are the subject of the CFTC order.
Primary Sources
- CFTC Order: Cayley Investment Management, LLC, et al
- CFTC Press Release: CFTC Orders Trader and His Firm to Pay $150,000 for Wash Sales
- CME Disciplinary Action: Mehran Khorrami
Originally published 7 May 2020
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