Shipkevich Bitcoin and ICO Attorney
Felix Shipkevich November 27, 2012

The U.S. Commodity Futures Trading Commission (CFTC) seems to be increasing the rate of its enforcement of financial regulation. The agency issued four new enforcement actions in the last week, against Eagle Market Makers, Cantor Fitzgerald, Harbor Light, and most recently, Intrade.

CFTC Issues Enforcement Action Against Eagle Market Makers

The wave of enforcement actions began on Nov. 20 with Eagle Market Makers Inc., a registered Futures Commission Merchant (FCM), Commodity Pool Operator (CPO), and Commodity Trading Advisor (CTA) based in Chicago, Illinois. Eagle is ordered to pay $223,000 for exceeding spot-month position limits in corn futures and for “failing to diligently supervise its traders,” the CFTC said.

Cantor Fitzgerald Fined by CFTC

Then, on Nov. 21, the CFTC continued by filing against (and settling with) Cantor Fitzgerald of New York. Cantor is a registered Futures Commission Merchant (FCM) that apparently failed to maintain the required funds in its customer segregation account—for three days. On top of the monetary penalty for violating the Commodity Exchange Act, Cantor will have to improve its “internal procedures” to ensure that the mistake does not happen again.

Harbor Light Asset Management Charged with Fraud, Misappropriation, and Embezzlement for Ponzi Scheme

The CFTC announced on Nov. 23 that Harbor Light Asset Management of Raleigh N.C. has been charged with running a Ponzi scheme “with the purpose of trading S&P futures contracts.” The scheme allegedly solicited $1.79 million from nearly four hundred investors located mostly in Raleigh.

The complaint against HLAM includes charges of embezzlement and failure to register against its owner and President, Michael Anthony Jenkins. According to a CFTC statement, Jenkins misappropriated nearly $750,000 of investors’ funds in order to “trade gold and oil futures, stock index futures, and E-mini futures.”

HLAM apparently told its customers that it was only trading E-mini futures; instead, falsely reported spreadsheets and profit statements masked the misappropriation of funds.

CFTC Charges Intrade’s “Prediction Market” with Violation of Trading Ban

Yesterday, the CFTC filed a civil complaint against Intrade The Prediction Market Limited and Trade Exchange Network Limited, both of Dublin, Ireland.  The complaint includes the charge that Intrade and TEN offered commodity option contracts to U.S. customers for trading—an action that violates the off-exchange options trading ban.

Intrade is a popular online service that allows its customers to bet on events, sports, and even weather. For nearly five years, from 2007 to 2012, Intrade offered options betting on a range of commodities. The CFTC is seeking a permanent injunction that would include fines and “disgorgement of all ill-gotten gains.”

As of today, Intrade has ordered all of its U.S. customers to close their accounts.

Read the CFTC statement here.