Tag Archives: futures

CFTC Orders Interactive Brokers LLC to Pay a $1.75 Million Penalty for Supervision Failures

The Commodity Futures Trading Commission today filed and simultaneously settled charges against Interactive Brokers LLC, a registered futures commission merchant, for failing to diligently supervise the handling of its customer accounts by not adequately preparing and configuring its electronic trading system to receive negative prices and calculate margin on April 20, 2020, in violation of CFTC Regulation 166.3.         

The order requires Interactive Brokers to pay a civil monetary penalty of $1.75 million and restitution of $82.57 million to its customers. Interactive Brokers is credited the full restitution due to its compensation payment to its customers. 

“This enforcement action demonstrates that the CFTC will hold registrants responsible for their handling of customer accounts and ensuring the integrity of trades on their trading platforms and electronic systems, including during instances of market volatility,” said Acting Director of Enforcement Vincent McGonagle.

Case Background

According to the order, Interactive Brokers’ supervisory failures were discovered on April 20, 2020, when the benchmark West Texas Intermediate light, sweet crude oil (CL) futures contract on CME Group Inc.’s New York Mercantile Exchange (NYMEX) traded into negative prices, settling at negative $37.63 per barrel for the May 2020 contracts set to expire the following day. This price was the basis for determining the settlement price for certain cash-settled contracts, including the E-mini crude oil (QM) futures contract on the NYMEX and the West Texas Intermediate light, sweet crude oil (WTI) futures contract on the Intercontinental Exchange Europe. Because the QM and WTI contracts settle based on the trading of the CL contract in the settlement window, both contracts settled at negative $37.63 per barrel. Interactive Brokers customers held long positions in the May QM and WTI contracts on April 20, 2020 and experienced trading losses on those positions as a result of the firm’s systems issues.

The order finds that Interactive Brokers was on notice of the possibility of negative oil futures prices prior to April 20, 2020, but did not adequately prepare and configure its electronic trading system to recognize negative prices. Specifically, Interactive Brokers failed to deploy necessary system changes before negative prices occurred resulting in two significant systems issues on April 20, 2020: (1) negative prices were not displayed to customers and customers were unable to place orders with negative-priced limit orders to buy or sell; and (2) internal minimum margin requirements were not correctly enforced prior to trade execution for trades in the WTI contract. These issues impacted hundreds of customer accounts that held long QM or WTI futures positions into settlement, and those customers experienced trading losses on April 20, 2020, initially determined by Interactive Brokers to exceed $82.57 million. 

The order recognizes Interactive Brokers’ substantial cooperation and systems remediation in the form of a reduced civil monetary penalty. 

The Division of Enforcement staff members responsible for this matter are Danielle Karst, Julia Colarusso, Dmitriy Vilenskiy, Christine Ryall, and Paul G. Hayeck.

Fitch downgraded Sinic – Chinese Real Estate Developer Slumps 87%

Fitch downgraded yesterday Sinic’s IDR to ‘CCC’ on the lower likelihood of bond refinancing.

Fitch Sinic’s downgrade reflects the diminishing likelihood of Sinic refinancing its immediate maturity, a USD 246 million bond due on 18 October 2021

Fitch does not believe that Sinic can reduce land acquisitions for a prolonged period due to its high-churn business model.


Sinic Holdings one of the biggest Chinese real estate developers slumped 87% at 0.50 and trading halted in Hong Kong as fears of Evergrande contagion grow in the region. The stock hit the daily low at 0.37, on Friday Sinic stock closed at 3.85.

Investors fear that Sinic will follow Evergrande in a panic effect through the Chinese economy and around the globe. Evergrande is trading 15% lower in Hong Kong on fears that the company will fail to meet the financial obligations expiring this week.

Last Wednesday, Fitch Ratings cut the outlook on Sinic (2103) Long Term Issuer Default Rating to Negative from Stable with a “B+” rating. Sinic Holdings faces a 9.5% 246 million bond expiring on October 18. Reports indicate that the company is planning a pay cut up to 70% to its senior management staff.

Stocks around the globe are under heavy selling pressure, Hang Seng index ended 3.30% lower at 24099. In Australia, the ASX 200 had its worst trading session in the last seven months with a loss of over 2%.

European Stocks in Deep Red

European stock markets followed Asian indices as investors dump stocks. The DAX index as of writing is 2.12% lower at 15160 while the FTSE 100 in London is giving up 1.72% at 6857. In Wall Street, the futures are also lower. S&P500 futures trading 1.04% lower at 4379 and the Nasdaq futures are 0.84% lower at 15183.

CFTC Charges Former Hawaii Resident in Forex and Futures Ponzi Scheme

The Commodity Futures Trading Commission today filed a civil enforcement action in the U.S. District Court for the District of Hawaii against Gregory Demetrius Bryant, Jr., formerly of Hawaii, for fraudulent solicitation, misappropriation, operation of an unlawful commodity pool, and failure to register with the CFTC.

According to the complaint, Bryant fraudulently solicited approximately $426,000 from at least 35 participants for pooled futures and foreign currency (forex) trading—misappropriating at least $356,000 to pay personal expenses, including international travel, shopping, and rent, as well as at least $66,000 to make Ponzi payments to conceal and further his fraudulent scheme.

Case Background

The complaint alleges that since approximately September 2016 through at least June 2020, Bryant—while using the alias “Gregory Surrey England,” purported president of the nonexistent company “Surrey Libor Capital, LLC”—falsely guaranteed monthly futures and forex trading returns of $6,000 to $8,000 in some instances and 60 percent to 80 percent in other instances. It is further alleged that Bryant made numerous false statements to prospective and current pool participants about his trading experience, his trading success, and being registered with the National Futures Association. According to the complaint, Bryant also failed to tell pool participants that he was a convicted criminal with a history of financial problems, including three bankruptcies.

Rather than trade futures and forex as he represented in his solicitations, Bryant, as alleged, misappropriated the vast majority of pool funds for personal expenses and to make purported “returns” to pool participants. Bryant further concealed his fraud and misappropriation of pool participants’ funds by falsely telling them their accounts were “in great shape,” to expect returns or disbursements soon, and/or that his business was being impacted by the coronavirus pandemic.

In its continuing litigation, the CFTC seeks restitution, disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.

The CFTC acknowledges and thanks the National Futures Association, the Federal Bureau of Investigation, and the U.S. Attorney’s Office for the District of Hawaii for their assistance.

The Division of Enforcement staff members responsible for this case are Elsie Robinson, Rachel Hayes, Jenny Chapin, Jeff Le Riche, Christopher Reed, Charles Marvine, and former staff member Jo Mettenburg.

CFTC’s Commodity Pool and Forex Fraud Advisories

The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Commodity Pool Fraud Advisory and the Forex Fraud Advisory, which alert customers these types of fraud and list simple ways to spot them.

The CFTC also strongly urges the public to verify a company’s or individual’s registration with the CFTC before committing funds. If unregistered, a customer should be wary of providing funds to that company or individual. A company’s or individual’s registration status can be found using NFA BASIC.

Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382), file a tip or complaint online, or contact the Whistleblower Office. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected paid from the Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the CEA. 

Europe’s First Bitcoin Futures, Based on ETC Group’s BTCetc Physical Bitcoin, to List on Eurex in September

  • First futures contract on a Crypto ETP in Europe launching 13 September 2021
  • BTCE is the world’s most heavily traded Crypto ETP
  • Eurex is the largest derivatives exchange in Europe

ETC Group ( www.etc-group.com ), Europe’s leading specialist provider of innovative, digital asset-backed securities, announces that Eurex, Europe’s largest derivatives exchange, will list Bitcoin ETN Futures on 13 September 2021 based on its flagship product BTCetc. This will be the first time futures contracts are available for investors on a Crypto ETP in Europe.

Bitcoin ETN Futures is based on ETC Group’s BTCetc™ – ETC Group Physical Bitcoin (ticker: BTCE), which launched on Deutsche Börse XETRA in June 2020. Since then it has been listed on multiple European exchanges, and is currently the world’s most heavily traded crypto ETP, with the narrowest spreads1. The new futures contract will be traded in Euros and physically delivered in BTCE, which is 100% backed by bitcoin and can be readily redeemed by any investor for the underlying bitcoin.

Bradley Duke, CEO of ETC Group said: “The announcement that Eurex will list a futures contract based on BTCE is a game changer, it firmly establishes BTCE as the benchmark Bitcoin ETP and go-to product for Bitcoin price discovery. We see the selection of BTCE by Europe’s largest derivatives exchange as recognition of the quality of the product and its world beating liquidity. Also, because BTCE is fully-fungible with the underlying bitcoin, it means physical settlement of the futures contract is enabled through BTCE’s standard creation/redemption mechanism.”

Randolf Roth, Member of the Eurex Executive Board said “Given the growing institutional demand for secure exposure to Bitcoin, we are delighted to begin listing these Bitcoin ETN futures on our regulated trading and clearing infrastructure at Eurex. This move will allow a greater number of market participants to trade and hedge Bitcoin, with this new future being treated in the same way as any other derivatives contract in terms of central clearing, netting, and risk management.”

This set-up allows investors to track the price development of Bitcoin in a fully regulated on-exchange environment and based on a transparent price discovery of the underlying BTCE. Structured in a similar way as physical Gold ETCs, with an equivalent physical redemption mechanism in place, BTCE’s primary listing trades on Deutsche Börse’s ETN trading segment since 18th June 2020. Bitcoin ETN futures are centrally cleared like any other derivatives traded on Eurex. Eurex’s standard clearing, netting, and risk management processes thereby come into effect, mitigating counterparty risk, and reducing operational costs for market participants.

Cryptocurrencies are highly volatile, and your capital is at risk.
Disclaimer: https://bit.ly/etcdisc

ETC Group ( www.etc-group.com ) is specialized in developing innovative digital asset-backed securities such as BTCetc (BTCE) and ETHetc (ZETH) which are currently listed on Deutsche Börse, Euronext, SIX, AQUIS UK and Wiener Börse. ETC Group is backed by a number of major London-based financial institutions. Shareholders include firms such as XTX Ventures, the venture capital arm of electronic market-making firm XTX Markets. ETC Group’s securities are marketed by HANetf.

Prepared Remarks of Gary Gensler, Chair of the Securities and Exchange Commission, Before the American Bar Association Derivatives and Futures Law Committee Virtual Mid-Year Program

Thank you for the kind introduction. It’s good to be back with the American Bar Association’s Derivatives and Futures Law Committee.

As is customary, I’d like to note that I’m not speaking on behalf of my fellow Commissioners or the SEC staff.

When I first appeared before this committee more than a decade ago, Washington was still developing the regulatory response to the 2008 financial crisis.

That crisis had many chapters, but a form of security-based swaps — credit default swaps, particularly those used in the mortgage market — played a lead role throughout the story.

International banks were using credit default swaps to hedge their bank loan portfolios — or so they thought.

These derivatives were also at the core of the $180 billion bailout of AIG, whose near-failure accelerated the crisis.

Reliance on those same credit default swaps allowed many banks to lower regulatory capital requirements to dangerously low levels.

CDS also contributed to weak underwriting standards, particularly for asset securitizations. Investors and Wall Street allowed them to stand in for prudent credit analysis.

At the end of 2007, the CDS market had notional value of $61 trillion[1] — more than 10 times larger than it had been in 2004.[2]

Though it’s a smaller market these days, credit default swaps still play an important role. The notional value of credit default swaps is more than $8 trillion.[3]

Further, the security-based swaps market involves more than just the credit default swaps that were at the center of the 2008 crisis. It also comprises single-name and narrow-based equity swaps, some of which are labeled total return swaps.

Though we don’t yet have reliable data on the size of equity swaps and total return swaps, from time to time they too have played an important role in our capital markets.

When Congress decided to bring reforms to the overall swaps market, they assigned authority over security-based swaps to the SEC. They assigned the bulk of the swaps market —including interest-rate, energy, agricultural, and other commodity-based swaps — to our sister agency, the Commodity Futures Trading Commission, which I had the honor of chairing at the time.

In these reforms, Congress sought to address two main issues in this previously unregulated market: reducing risk and increasing transparency.

The reforms included two main ways to reduce risk. First, dealers would have to register with the SEC. In doing so, they’d need to have key back-office controls and adequate cushions against losses, through both their capital levels and customer margin.

This year, the SEC is implementing rules related to some of those authorities mandated by Congress 11 years ago.

To that end, security-based swap dealers and major security-based swap participants will begin registering with the Commission by Nov. 1. We expect that 45 to 50 entities will register as security-based swap dealers — some of which will be from the same family of firms.

The registration requirements include new counterparty protections, requirements for capital and margin, internal risk management, supervision and chief compliance officers, trade acknowledgement and confirmation, and recordkeeping and reporting procedures. These areas are focused on reducing risk in our markets.

Further, given the global nature of the security-based swaps market, international dealers have asked the SEC for the ability to comply with rules from their home jurisdictions, while still meeting U.S. regulations.

There’s a process that the Commission established several years ago by which we consider whether to grant this substituted compliance to dealers. For the Commission to grant substituted compliance, dealers’ home jurisdictions must have comparable rules of the road to ours in the U.S. and effectively supervise and enforce those rules.

To grant substituted compliance, we must ensure that those other regimes indeed produce comparable outcomes to the SEC’s own regulations. We don’t want dealers to be incentivized to move among jurisdictions so they can take advantage of regulatory arbitrage.

For the last 18 months, the agency has engaged with a number of foreign authorities and security-based swap dealers in consideration of substituted compliance.

The Commission has finalized a substituted compliance determination order with respect to key back-office controls for German firms with a prudential regulator. We expect to receive additional applications for substituted compliance from foreign jurisdictions soon.

One of the features of the SEC’s application process is that completed applications for substituted compliance are also published for notice and comment, and we value the input of commenters into this process. The Commission has noticed applications for the UK and France.

Given the coordination with applicants and foreign authorities, evaluating these substituted compliance applications is a significant undertaking. For example, our substituted compliance regime requires, for jurisdictions where substituted compliance is granted, that there be a supervisory and enforcement memorandum of understanding or other arrangement in place to facilitate information-sharing between the SEC and the relevant foreign authorities. In light of that, SEC staff are working to finalize recommendations to the Commission for substituted compliance determination orders and for the Commission to enter into MoUs expeditiously.

The other part of Dodd-Frank’s risk-reduction regime is through central clearing.

In 2016, we adopted new rules for clearinghouses. The SEC regulates three clearinghouses that voluntarily clear security-based swaps: ICE Clear Credit, ICE Clear Europe, and LCH SA.

Next, I’d like to discuss transparency. Congress determined that the security-based swap markets would benefit from more transparency, promoting efficiency of markets and lowering risks.

Post-trade, this would mean the public could see the price and volume of transactions. Pre-trade, this would mean that buyers and sellers could meet on a trading platform with transparent prices.

In 2015 and 2016, the SEC completed rules related to post-trade transparency. On Nov. 8, these new rules will go into effect, requiring these transaction data to be reported to a swap data depository, and thus available to the SEC and, under appropriate circumstances, other regulators.

Then, beginning on Feb. 14, 2022, the swap data repositories will be required to disseminate data about individual transactions to the public, including the key economic terms, price, and notional value.

Together, this information will greatly enhance post-trade transparency on a transaction-by-transaction basis.

Further, to allow the Commission and the public to see aggregate positions, Congress under Exchange Act section 10B gave us authority to mandate disclosure for positions in security-based swaps and related securities. I’ve asked staff to think about potential rules for the Commission’s consideration under this authority.

As the March collapse of the family office Archegos Capital Management showed, this may be an important reform to consider.

At the core of that story was Archegos’ use of total return swaps based on underlying stocks and significant exposure that the prime brokers had to the family office.

The limited transparency in this market, combined with potential shortcomings in market participants’ risk management, contributed to firms’ taking overly large positions and to subsequent system-wide tremors when firms started to unwind those positions.

I believe additional public disclosure of that fund’s positions, as well as public dissemination of individual transactions in total return swaps, may have helped.

This wasn’t the first time that one fund’s use of total return swaps had far-reaching implications for the capital markets, as the 1998 collapse of Long-Term Capital Management showed.[4]

In addition, the Commission has yet to finish the rules for the registration and regulation of security-based swap execution facilities (SEFs).

Back in 2011, the SEC proposed rules for security-based SEFs. I’ve asked staff to recommend how we can best harmonize security-based SEFs rules with those that have been in place under the CFTC for nine years and have been effective. To accomplish this, I would envision that we would put out another notice-and-comment rulemaking.

I believe aligning the SEC’s regime with the CFTC’s could garner many of the same benefits — bringing together buyers and sellers with transparent, pre-trade pricing and lowering risk in the marketplace.

This approach also could limit additional costs on security-based SEFs and their market participants because many of them already are subject to the CFTC’s rules.

Together, the rules going live this fall will increase transparency and reduce risk in the derivatives market. I believe they’re long overdue.

Various market events over the decades — from Long-Term Capital Management in 1998 to AIG in 2008 to Archegos in 2021 — remind us that we need to consider using all of our authority if we are to meet our obligations under the Dodd-Frank Act.

Thus, I’ve asked staff to consider ways we can continue to increase transparency and reduce risk through our unused authorities, particularly with regard to security-based SEFs and position reporting. I’ve also asked staff to make recommendations on proposed rules for the Commission’s consideration on the anti-fraud and anti-manipulation mandate from Dodd-Frank, as now included in Section 9(j) of the Exchange Act.

Before I conclude, I’d briefly like to discuss the intersection of security-based swaps and financial technology, including with respect to crypto assets. There are initiatives by a number of platforms to offer crypto tokens or other products that are priced off of the value of securities and operate like derivatives.

Make no mistake: It doesn’t matter whether it’s a stock token, a stable value token backed by securities, or any other virtual product that provides synthetic exposure to underlying securities. These platforms — whether in the decentralized or centralized finance space — are implicated by the securities laws and must work within our securities regime.

If these products are security-based swaps, the other rules I’ve mentioned earlier, such as the trade reporting rules, will apply to them. Then, any offer or sale to retail participants must be registered under the Securities Act of 1933 and effected on a national securities exchange.

We’ve brought some cases involving retail offerings of security-based swaps; unfortunately, there may be more.

We will continue to use all of the tools in our enforcement toolkit to ensure that investors are protected in cases like these.

Thank you again for having me today, and I look forward to answering your questions.

[1] See Bank for International Settlements, “The credit default swap market: what a difference a decade makes” (June 2018), available at https://www.bis.org/publ/qtrpdf/r_qt1806b.htm.

[2] See CFA Institute, “Credit Default Swaps and the Credit Crisis (Digest Summary),” available at https://www.cfainstitute.org/en/research/cfa-digest/2010/05/credit-default-swaps-and-the-credit-crisis-digest-summary.

[3] See BIS Statistics Explorer, “Credit default swaps, by type of position,” available at https://stats.bis.org/statx/srs/table/d10.1?f=pdf. Cited number refers to notional amounts outstanding for the second half of 2020.

[4] See “Treasury Under Secretary Gary Gensler Testimony Before the House Committee on Banking and Financial Services” (May 6, 1999), available at https://www.treasury.gov/press-center/press-releases/Pages/rr3137.aspx.

CME Group to Launch Micro WTI Futures on July 12

CME Group, the world’s leading and most diverse derivatives marketplace, today announced it will expand its suite of micro-sized futures contracts with the introduction of Micro WTI futures.  The contracts are expected to launch on July 12, pending regulatory review.

Micro WTI futures will be one-tenth the size of the company’s global benchmark WTI Crude Oil futures contract and cash-settled. They will enable market participants – from institutions to sophisticated, active, individual traders – to fine-tune exposure to crude oil markets and enhance their trading strategies in an efficient, cost-effective way.

“As U.S. crude continues to gain global significance, we are seeing increasing demand for tools that help a broader range of clients access these markets,” said Peter Keavey, Global Head of Energy Products at CME Group. “WTI futures have always been a top product for active traders around the world, and the smaller size of Micro WTI futures will offer more flexibility and greater precision to market users – all while enabling them to benefit from the transparency and liquidity of the world’s most robust crude oil contract.”

“Interactive Brokers’ advantage has always been our low cost, advanced technology, and breadth of products offered,” said Steve Sanders, Executive Vice President, Marketing and Product Development at Interactive Brokers. “We are excited to add Micro WTI futures to our product roster, which will allow more of our sophisticated individual investor and active trader clients to participate in the global oil markets.”

“We continue to see demand from retail active traders for micro sized futures products like this that provide access to attractive markets with greater flexibility and efficiency,” said J.B. Mackenzie, Managing Director at TD Ameritrade Futures and Forex, LLC.  “The launch of Micro WTI futures brings the crude oil markets to our clients in a more cost-effective way and is one more tool to help our clients diversify their exposure and hone their trading strategies.”

“As a growing audience of self-directed investors and traders continues to gravitate to the futures markets, we are excited to introduce the new Micro WTI Crude Oil contracts to the NinjaTrader user community,” said Martin Franchi, CEO of NinjaTrader Group, LLC.  “The smaller contract size available through this product innovation will significantly increase accessibility for more traders to this dynamic market and the opportunities available through futures.”

“TradeStation Securities, Inc. is proud to continue our strong relationship with CME through the launch of Micro Crude Oil Futures. As a platform for retail and institutional investors, we’re excited to offer our clients access to U.S. crude at a lower barrier of entry,” said John Bartleman, President of TradeStation Group, Inc., TradeStation’s parent company. “As day-one supporters of this new product, we’re continuing to prioritize our clients access to the latest Futures products and technology.”

Micro WTI futures will be cash-settled based on the daily settlement price of NYMEX WTI futures. The contracts will be listed on and subject to the rules of NYMEX. For more information or for product specifications please see: https://cmegroup.com/micro-wti

As the world’s leading and most diverse derivatives marketplace, CME Group (www.cmegroup.com) enables clients to trade futures, options, cash and OTC markets, optimize portfolios, and analyze data – empowering market participants worldwide to efficiently manage risk and capture opportunities. CME Group exchanges offer the widest range of global benchmark products across all major asset classes based on interest ratesequity indexesforeign exchangeenergyagricultural products and metals.  The company offers futures and options on futures trading through the CME Globex® platform, fixed income trading via BrokerTec and foreign exchange trading on the EBS platform. In addition, it operates one of the world’s leading central counterparty clearing providers, CME Clearing. With a range of pre-and post-trade products and services underpinning the entire lifecycle of a trade, CME Group also offers optimization and reconciliation services through TriOptima, and trade processing services through Traiana.

Federal Court Orders Oregon Owner of Precious Metals Firm to Pay $1.3 Million to Victims of Fraudulent Precious Metals Scheme

The Commodity Futures Trading Commission today announced that the U.S. District Court for the Western District of Washington entered a consent order against Aaron Michael Scott of Portland, Oregon for fraud and misappropriation in connection with a precious metals scheme run by Scott and his now defunct company, BMC Worldwide, Inc. (d/b/a Blue Moon Coins).  The order requires Scott to pay $1,381,461.86 in restitution to defrauded customers. Additionally, the order prohibits Scott from further violations of the Commodity Exchange Act and CFTC Regulations and permanently bans him from registering with the CFTC and trading in any commodity interests.

Case Background

The order resolves a CFTC action against Scott for engaging in fraud and misappropriation in connection with a gold-and-silver scheme from at least October 2013 through April 2014. The case was filed on October 3, 2018. [See CFTC Press Release No. 7822-18]

The order finds that Scott and BMC fraudulently represented that BMC was a highly successful precious metals firm. As detailed in the order, Scott and BMC persuaded customers to purchase gold and silver from BMC by claiming that, among other things, they maintained an inventory of precious metals in stock and would fulfill a customer’s order from that inventory or would purchase precious metals from a supplier upon receipt of payment.

The order also states that Scott and BMC did not maintain an inventory of precious metals sufficient to fulfill customer orders and, in many cases, made no effort to secure the precious metals needed to fulfill customer orders. Instead, they misappropriated the vast majority of customer funds and used them to pay BMC’s operating expenses, invest in other businesses, pay unrelated debts, and refund disgruntled customers or fulfill other customer orders in the nature of a Ponzi scheme.

Parallel Criminal Action

In a separate, parallel criminal action, Scott pleaded guilty to wire fraud on November 1, 2018. [United States v. Scott, No. CR18-5500-RBL (W.D. WA.)]  The court sentenced Scott to four years in prison and three years of supervised release on April 5, 2019. The CFTC appreciates the assistance of the U.S. Attorney’s Office for the Western District of Washington.

The CFTC cautions that orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure wrongdoers are held accountable.

The Division of Enforcement staff members responsible for this case are Stephen Turley, Jenny Chapin, Brett Shanks, Jeff Le Riche, Christopher Reed, and Charles Marvine, as well as former staff members James Humphrey, Peter Riggs, and Jo Mettenburg. 

*   *   *   *

CFTC’s Precious Metals Customer Fraud Advisory

The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Precious Metals Fraud Advisory, which alerts customers to precious metals fraud and lists simple ways to spot precious metals scams.

Also, before investing or trading with a firm, check the firm’s registration status and disciplinary history, if registered, with the National Futures Association. A company’s registration status can be found at: www.nfa.futures.org/basicnet.

Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382), file a tip or complaint online, or contact the CFTC Whistleblower Office at whistleblower.gov. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected paid from the CFTC Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the Act.

Murban Crude Oil Futures – ADM

The Murban Crude Oil Future is a physically delivered contract, basis FOB Fujairah (ADNOC) loading terminal, UAE.

The contract will provide users with an effective hedging instrument for Arab Gulf crude oil and other grades trading into the Asia Pacific Region. The underlying physical market is for Murban crude oil available without the local Abu Dhabi resale restriction.

Trading Screen Product Name

Murban Crude Futures

Trading Screen Hub Name

Abu Dhabi


Murban Crude Oil, as defined in the Exchange and Clearing House rules.

Contract Symbol


Contract Size

1,000 barrels

Unit of Trading

Any multiple of 1,000 barrels


US Dollars and cents

Trading Price Quotation

One cent ($0.01) per barrel

Settlement Price Quotation

One cent ($0.01) per barrel

Minimum Price Fluctuation

One cent ($0.01) per barrel

Last Trading Day

Trading in the prompt delivery month shall cease at 16:30 Singapore Prevailing Time on the last Trading Day of the second month preceding the delivery month.

If the day on which trading is due to cease is the Trading Day preceding New Year’s Day, then trading shall cease on the next preceding Trading Day.

Daily Settlement

The Daily Settlement Price will be published at 19:30 London Prevailing Time every Trading Day with the exception of the Last Trading Day where no such prices for the expiring contract month will be published.

The Daily Settlement Price is the volume weighted average price of trades between 19:28 and 19:30 London Prevailing Time, or as determined by the Exchange, as detailed within the Trading Procedures of the IFAD Rulebook.

Exchange Delivery Settlement Price

The final settlement price, as determined by the Exchange on the Last Trading Day of the expiring contract month, will be the Marker Price published at 16:30 Singapore Prevailing Time and shall be the basis for delivery.


The Exchange will publish daily Marker Prices at 16:30 Singapore Prevailing Time and 16:30 London Prevailing Time (or as otherwise determined and communicated by the Exchange from time to time).

Each Marker will be a volume weighted average price of trades in the one minute preceding the marker time and will be published for the front three contract months.

There will be no Marker Price published at 16:30 London Prevailing Time on the Last Trading Day for the expiring contract month.

Delivery Date

Delivery shall commence no earlier than the first Terminal Loading Day of the delivery month and no later than the third Terminal Loading Day prior to the end of the said delivery month. Futures delivery shall be completed within the delivery month.

Delivery Methods

Delivery shall be made by the Seller to the Buyer on a F.O.B. basis at the Fujairah (ADNOC) loading terminal and shall be made in accordance with all applicable State and local laws and regulations. Delivery is to be made into Buyer’s Vessel during the delivery month.

A loading volume tolerance of plus or minus 0.2% of the contract volume is permitted.

There is no specified minimum quantity of Murban Crude Oil to be delivered for the purposes of this Contract. However, parties should be made aware that in relation to each Vessel the Terminal Operator imposes a minimum loading requirement (which may be amended from time to time) of two hundred thousand (200,000) Barrels for deliveries at the Terminal.

For the purposes of complying with the minimum limit imposed by the Terminal Operator, Members may co-load Barrels resulting from over the counter (OTC) transactions with Exchange traded transactions relating to the Contract.

Contract Series

Up to 48 consecutive months

Business Days

ICE business days

MIC Code


Clearing Venues


FIA announces 2021 Futures Hall of Fame inductees

FIA today announced the induction of eight new members into the FIA Futures Hall of Fame. This year’s class joins 157 other honorees in the Hall of Fame, which was established in 2005 on FIA’s 50th anniversary. The new members will be honored at an awards ceremony during FIA’s annual flagship Boca International Futures Industry Conference.

Walt Lukken, president and CEO of FIA said: “We established the FIA Futures Hall of Fame to recognize the people who have made exceptional contributions to the growth and development of the futures, options and listed derivatives industry. This year’s inductees represent business leaders, advocates, policymakers, and visionaries who have provided the leadership and support necessary to keep growing our industry. FIA is honored to present them with this recognition.”

The following individuals were inducted into the Hall of Fame:

Brooksley  Born 

Bryan Durkin 

Gay Huey Evans 

Jeffrey  Geldermann   

Douglas Harris   

Jerome Kemp   

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Copper Price Hits 9-year Highs

Copper price hits 9-year highs amid strong demand for manufactured goods and China’s strong economic rebound after the coronavirus health crisis. The first-month futures contracts in COMEX is trading at $3.9635 having early today as high as $3.9750, a price that we haven’t seen since February 2012. Copper hit $4.65 per pound, the all-time high, back in February 2011.

In London Metal Exchange the three-month copper futures trading today at 8632 per tonne.

Copper price ended in 2020 with over 22% gains, while now Copper is on track for it’s 11th straight monthly gains, while is 8.8% higher since the start of the year. The gains since the March 2020 lows are now up to 98%. Many analysts believe that the rally is just the start of a super-cycle in metals as the demand for the base metals from renewable energy projects is growing.

The main factors that drive the recent rally are the weak U.S. dollar the rising inflation expectations in the USA and below-average stock levels. Excess demand from China and South Korea also boosts the copper price.

Goldman Raised the Copper Price Target

Goldman Sachs has raised the copper target price in the next 12-months to $10.500 per metric ton as the big deficit on copper scarcity expects to rise amid increased demand. Goldman also set the 3-month price target at $9.200 per metric ton and the 9-month target at $9.800.

Goldman expects that copper price will average at $8,625 in 2021, and an average of $9,175 in 2022.

Copper Technical Analysis

The Copper price is 1.60% higher at 3.9630 having hit the daily high which is also an all-time high at 3.9750. The trend is clearly bullish for the industrial metal and higher levels are on the cards. A warning signal for bulls is that the copper price has reached an overbought level as the RSI 14 hovers today above the 78 mark, while on the weekly chart the RSI is at 76.87 just below the all-time high that the RSI reached back in December 2020.

First miner resistance for the copper stands at 3.9895 the high from February 6, 2012. More selling pressure would emerge at 4.0245 the top from September 11, 2011. The most critical point is the top from August 29, 2011, at 4.2055 which if breached might push the price up to all-time highs.

On the other hand, support for copper price would be met at 3.8855 the daily low. A close below might test 3.7940 the low from yesterday trading session. A close below 3.7210 might cancel the recent rally and might push the price towards 3.6240 the 50-day moving average.