Search Site
Menu
The CFTC’s First Ever Case of Insider Trading

Two months ago, for the first time, the Commodity Futures Trading Commission flexed its new anti-fraud powers under the Dodd-Frank Act to punish insider trading in the futures markets.

How so? The agency filed and settled an enforcement action against an employee whose job was to trade energy futures for a large corporation. Allegedly, the employee used access to confidential information about the timing, volume, and prices of the company’s trades to profit his own personal accounts at his employer’s expense. He allegedly executed trades between the company’s account and his personal accounts, thus playing both sides of the deal, and he allegedly placed other personal orders just ahead of orders he placed for the company, thus benefiting from price movements caused by the company’s much larger trades. These actions violated the Commodity Exchange Act and its regulations.

Under the terms of the settlement, the employee did not admit or deny the agency’s findings and conclusions, but he agreed to pay restitution in the amount of $217,000, a monetary penalty of $100,000, and post-judgment interest on both. He also consented to a permanent bar from trading in commodities directly or indirectly.

For more details, here’s a copy of the Commission’s press release, and here’s a copy of the order itself. For more in-depth analyses on what this may mean for the agency’s enforcement efforts going forward, see here and here.

Contact us

Please fill out the form below and one of our attorneys will contact you.

Quick Contact Form

Office Location
  • Irvine Office
    1 Park Plaza
    Suite 600
    Irvine, California 92614
    Phone: 714-673-6798
    Fax: 714-673-6812
Do you need an attorney?
I highly recommend Mani Dabiri

Mr. Dabiri is an excellent attorney. He is professional, ethical and sensitive to his clients situation. I highly recommend Mr. Dabiri. He helped me navigate uncharted legal waters successfully.

- a client (5 star review)

Read more

Ratings and Reviews