The CFTC has filed and settled charges against Craig A. Taffel for operating as an unregistered Futures Commission Merchant (“FCM”). The registered floor broker based in Chicago has been ordered to pay $180,000 in civil monetary penalty, and must cease and desist from further violations of the Commodities Exchange Act.
According to the CFTC, from March 2008 to March 2010 Taffel allowed four individuals to place trades in his personal trading account at the FCM. In that time, he executed at least 141 trades in commodity futures for them, totally at least 407 contracts. The individuals would give Taffel instructions via instant messages, e-mails, and phone calls, and he would execute them. Each was assigned a sub-account, and Taffel would margin their trades from his master account. Furthermore, three of the four individuals worked for some of Taffel’s corporate customers, and were privy to their employer’s future orders.
Taffel acted as an FCM when he accepted order for the purchase and sales of futures, and when he accepted money, securities, property, or extended credit to margin, guarantee or secure trades or contracts. To perform these trading functions, individuals and firms must be registered with the NFA and in compliance with all relevant CFTC regulations.