Futures Broker fined for engaging in a fraudulent trading scheme
The Commodity Futures Trading Commission (CFTC) issued an Order filing and simultaneously settling charges against Christian Robert Mayer of Eden Prairie, Minnesota, for engaging in a fraudulent trading scheme involving unauthorized trades in cattle, crude oil and wheat futures contracts.
The CFTC Order requires Mayer to pay a $100,000 civil monetary penalty and imposes permanent trading and registration bans on him. The Order also requires Mayer to cease and desist from further violations of the Commodity Exchange Act, as charged.
James McDonald, Director of the CFTC’s Division of Enforcement, stated: “Introducing Brokers serve an important role in connecting customers to our futures markets. But these customers are entitled to trust that the brokers will handle their trades honestly. When the brokers do not—but instead defraud their own customers as respondent did here—the Commission will vigorously pursue that misconduct.”
The Order finds that, between October 29, 2014, and September 28, 2016, Mayer, a registered Associated Person of a Minneapolis Commodity Trading Advisor and Introducing Broker (the IB), engaged in a fraudulent trading scheme in which he conducted unauthorized futures trading in customers’ accounts, and then transferred the profitable unauthorized trades from those accounts to his personal trading account while leaving losing trades in the customers’ accounts. Mayer then logged on to the online portal of the Futures Commission Merchant which carried all the accounts, accessed the transfer section of the portal, and fraudulently indicated that the reason for the trade transfer request was that he had placed the trade in the wrong account.
When the IB discovered these unauthorized trades and transfers, it promptly issued checks to the defrauded customers totaling $105,090 to reimburse them for Mayer’s fraudulent conduct. These checks represented the amount of the losing trades that Mayer left in their trading accounts, plus the profitable trades that Mayer improperly transferred from the customers’ accounts to his personal trading account. These amounts came from money paid by Mayer to the IB for purposes of reimbursing the defrauded customers.
CFTC Division of Enforcement staff members responsible for this case are Luke B. Marsh, George H. Malas, and Paul G. Hayeck.