Cantor Fitzgerald & Co (Cantor) of New York was charged by the U.S. Commodity Futures Trading Commission (CFTC) for engaging in wash sales and causing illegal trading of Reformulated Gasoline Blendstock for Oxygen Blending (RB) – a gasoline futures contract, at the New York Mercantile Exchange (NYMEX). The CFTC cited Cantor, a duly registered futures commission merchant since 1982, for unlawfully performing noncompetitive transactions of RB.
On February 22, 2011, Cantor was required to pay $100,000 in civil monetary penalties. The CFTC also required Cantor to cease and desist from further breaching the Commodity Exchange Act (CEA) and CFTC regulations and to abide accordingly in its future undertakings.
The CFTC has found that in March and April of 2007, a Cantor employee made a deal with a number of floor brokers from two different brokerages. These brokers were instructed to buy and sell futures contracts for RB for a same price for a single customer, resulting in an illegal wash sale.
Cantor is held liable for this employee’s breach of the CEA and CFTC regulations as he was acting within the scope of his employment with Cantor.