The CFTC has secured a default judgement order against Otmane El Rhazi requiring him to pay $1.49 million in restitution and civil monetary penalties. El Rhazi, a former futures and option trader and Vice President of Citigroup Global Markets Ltd in the United Kingdom, was accused of non-competitive trading, misappropriation, and fraud in April of this year by the CFTC.
A federal judge in New York has found that, beginning in November 2010, El Rhazi conducted a series of non-competitive palladium and platinum futures trades on the Globex trading platform at the New York Mercantile Exchange. These trades were made between a Citibank, N.A. proprietary account and personal account, and allowed him to accrue money at the expense of the Citibank account. He set up the trades so that there was no net change in the open positions of either account, while pocketing $373,860. This was accomplished by entering one of the trades at an off-market price when the market was at a low volume outside of pit trading hours, and sticking to illiquid contracts like palladium and platinum.
After proper service was effected on El Rhazi in April he failed to answer or defend against the action, and a default judgement has therefore been issued. In addition to restitution and civil monetary penalties, El Rhazi is subject to permanent trading and registration bans.
Read more about this CFTC enforcement action.