July 12, 2019

CFTC Files and Settles Enforcement Actions Against Two Futures Commission Merchants and an Introducing Broker Arising from Unauthorized Trading and Improper Bunched Orders

Washington, DC — The Commodity Futures Trading Commission (CFTC) today announced civil enforcement actions against one former and one current futures commission merchant, as well as an introducing broker and its principals, filing and simultaneously settling charges arising from unauthorized options trading and improper bunched orders, including failure to supervise charges.

“Commission registrants have a responsibility and obligation to ensure that they are taking appropriate steps, consistent with the Commodity Exchange Act and Commission Regulations, when handling and executing trade orders on behalf customers,” said Division of Enforcement Director James McDonald.  “The actions today reflect that the Commission will take very seriously failures by its registrants to diligently perform their responsibilities, which can undermine customer protection.”

See summary of actions below.  Full press releases, including charging documents, are at cftc.gov.

Dean Katzelis and Shahin Maleki d/b/a Essex Futures 

The CFTC today issued an Order filing and settling charges against Dean Katzelis and Shahin Maleki d/b/a Essex Futures (Essex) and requiring them to pay a $500,000 civil monetary penalty.  The Order finds, among other things, that from January 1, 2014, to September 24, 2017, Essex, a registered guaranteed introducing broker, improperly combined trades in bunched orders, engaged in unauthorized trading, and failed to supervise its employees who permitted the bunched trades and unauthorized trading to occur.

Vision Financial Markets LLC

The CFTC today issued an Order filing and settling charges against Vision Financial Markets LLC (Vision).  The Order requires Vision to pay a civil monetary penalty of $200,000.  The Order finds that from at least January 1, 2014, to November 30, 2014, Vision, a then-registered futures commission merchant which guaranteed Essex, failed to adequately supervise its employees to ensure (i) they properly executed bunched orders, and (ii) they executed orders for non-discretionary Essex customers only when Essex had obtained specific customer authorization for the transaction.

ADM Investor Services Inc.

The CFTC today issued an Order filing and settling charges against ADM Investor Services Inc.  The Order requires ADM Investor Services Inc. to pay a civil monetary penalty of $250,000.  The Order finds that from December 1, 2014, to September 24, 2017, ADM Investor Services Inc., a registered futures commission merchant which guaranteed Essex, failed to adequately supervise its employees to ensure (i) they properly executed bunched orders, and (ii) they executed orders for non-discretionary Essex customers only when Essex had obtained specific customer authorization for the transaction.