An introducing broker and its principals agreed to settle CFTC charges for fraudulent solicitation, unauthorized trading, violating a CME Group ("CME") financial market position limits and supervisory failures causing customer losses of approximately $11.9 million.
According to the CFTC Order, respondent Kooima & Kaemingk ("K&K"), through an employee and one of its principals, fraudulently solicited customers to open discretionary trading accounts by misrepresenting the safety and profitability of futures and options trading, engaged in unauthorized trading in customer investment accounts, which in one customer's investment account also exceeded CME position limits. The CFTC further alleges that K&K attempted to cover up the scope of the unauthorized trading during an investigation by the CME. The CFTC found that respondents failed to supervise an employee's handling of customer accounts.
The respondents agreed to pay nearly $12 million in restitution to their customers and a monetary penalty of $1.25 million. In a related action, a Panel of the CME Business Conduct Committee imposed monetary sanctions on respondents for conduct that overlaps with that sanctioned by the CFTC.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
