The CFTC charged a resident of Puerto Rico and his firm with trading on material nonpublic information on gas futures received from an insider at an energy company.
In a Complaint filed in the U.S. District Court for the Southern District of Texas, the CFTC stated that between August 2015 and December 2018 the individual received confidential block trade information from a trader at an energy company through a "tipping chain" and then (i) executed non-arm's length, fictitious block trades in the specified gas futures and (ii) entered into corresponding trades for physically delivered natural gas futures for the same quantity and contract month. The CFTC alleged that, as a result of the prohibited trading, the individual generated more than $1.5 million in profits.
The CFTC is charging the individual and the firm with violating provisions of CEA Sections 4c ("Prohibited transactions") and 6(c) ("Prohibition regarding manipulation and false information") and CFTC Rule 180.1 ("Prohibition on the employment, or attempted employment, of manipulative and deceptive devices").
The CFTC is seeking (i) permanent injunctions, (ii) disgorgement and restitution, and (iii) civil money penalties.
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