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Mar 24, 2018

SEC And CFTC Enforcement Lawyer

Any investigation pertaining to the SEC or the CFTC is serious. These are serious investigations that can lead to both criminal and civil penalties. While FINRA disciplinary actions apply to professional conduct, and have consequences which apply only to finance and securities industries – an SEC or a CFTC investigation can lead to criminal consequences. While FINRA disciplinary actions might only apply to professional conduct, and can have consequences within the finance and securities industry only — an SEC, or a CFTC investigation can result in criminal consequences in addition to civil penalties.

Our law firm can help with SEC and CFTC issues such as:

  • “Churning” (excessive trading)
  • Insider trading
  • Misrepresentation, omissions and false statements
  • Unsuitable investments
  • Unauthorized trades
  • Breach of fiduciary duty
  • Over-concentration
  • Failure to execute trades
  • Failure to supervise brokers
  • Breach of contract
  • Margin account abuse
  • Registration violations
  • Professional negligence
  • Market manipulation
What Is The CFTC?

A recent report that came out on Mar. 20, 2018 revealed the role that CFTC is playing the U.S. economy. Apparently, the CFTC has announced that Middle District of Florida Judge Brian J. Davis has ordered Maverick International, Inc. together with its principals Wesley Allen Brown and Edward Rubin to pay $8,605,274.92 for committing commodity futures fraud and for violating commodity laws of the federal government. It seems that the CFTC is actively performing its role of safeguarding commodity trading in the country. What is CFTC and what is its role in protecting the citizens of the United States?

The Nature Of The CFTC

CFTC is the acronym for Commodity Futures Trading Commission. It is a U. S. government agency that was established in 1974 and its fundamental task is to regulate the country’s option and futures market. The CFTC is the U.S. agency that implements the Commodities Exchange Act which bans dishonest practices in the futures trading market.

A Brief History Of The CFTC

For over 150 years, contract for futures of agricultural commodities are being traded in the country. Starting in the 1920s the regulation and supervision of this sector of the U.S. economy has fallen on the shoulders of the Federal government. The first law that regulated the commodities and futures market in the U.S. is the Grain Futures Act of 1922. It was later taken over in 1936 by the Commodity Exchange Act.

During the 1970s, the trading of future contracts has significantly increased beyond its normal agricultural and physical commodities limit and incorporated a broad range of financial instruments that included foreign and U.S. stock indices, foreign and U.S. government securities, and foreign currencies.

In 1974, the U.S. Congress created the CFTC with its mandate to regulate the futures market. Through the provisions of the 1974 Commodity Futures Trading Commission Act, the agency was established. It effectively replaced the Commodity Exchange Authority of the country’s Department of Agriculture. With this Act, the CFTC became the sole authority of the U.S. government to regulate the options and commodity futures markets in the country.

In December 2000, the mandate of the CFTC was renewed and increased by the passing of the Commodity Futures Modernization Act of 2000 by the U.S. Congress. This act ordered the CFTC together with the SEC to create a joint regulatory body for products of single-stock futures which have started trading in November 2002. By 2003, swaps have considerably increased in value since they were launched in the latter months of 1970s. In 2010, CFTC’s authority increased further with the passing of the Dodd-Frank Act which gave it authority over the swaps market. This act prevented the careless implementation of manipulative schemes that circumvents the need to determine the actual intent of the accused to change prices and the creation of artificial prices.

The Primary Mission of the CFTC

As stated in its official website, CFTC’s primary mission is to encourage transparent, open, financially sound and competitive markets. It aims to shield market users consumers, and their funds, as well as the public from manipulation, abusive practices and fraud in relation to derivatives and other related products that are subject to the rules and regulations stipulated by the Commodity Exchange Act. CFTC tries to accomplish its primary aim by doing its best to avoid systemic risk.

After the financial crisis that the US and the world have experienced in 2007 to 2008, the CFTC has been transforming its operations to bring stricter regulation and initiate better transparency to the $400 trillion swaps market. Since 2010, this agency has been implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act to fulfill its stated mission.

The Responsibility Of The CFTC

The CFTC takes on several responsibilities in its mandate of regulating the country’s futures and commodities market. These responsibilities include the promotion of the integrity of the market. To perform this responsibility, the CFTC supervises and controls the derivatives market so that abuses can be minimize or totally prevented. A variety of organizations and individuals are being supervised by the CFTC as it performs its responsibilities. These include designated contract markets, swap dealers, derivatives clearing organizations, Commodity pool operators, futures commission merchants, swap execution facilities, and other groups and entities.

Why Is The CFTC Important?

The importance of the CFTC in the conduct of the U.S. economy lies in its stated mission and responsibilities. It is regulating an important financial sector of the country’s economy. The CFTC is essential to the way that businesses, financial institutions and investors in the U.S. are managing their risks. All the stakeholders in the U.S economy including manufacturers, municipalities, ranchers, producers, farmers, commercial enterprises and many more sectors of the U.S. society are using the markets to establish a rate or a price. This agency enables these stakeholders to focus on the things that they can do best such as creating jobs, generating services and goods, and innovating. The CFTC is working hard to enable market participants and other hedgers to utilize the market with confidence.

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Brooklyn, NY 11201

Manhattan

140 Broadway, 46th Floor
New York, NY 10005

Phone

888-977-6335

Queens

35-37 36th St,
Astoria, NY 11106

Phone

888-977-6335

Brooklyn

195 Montague St.
14th Floor,
Brooklyn, NY 11201

Phone

888-977-6335