New York, NY – The Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action against Andrew Gizienski of Houston, Texas, and EOX Holdings LLC, an Introducing Broker, alleging insider trading and supervisory failures. The case, filed in the U.S. District Court for the Southern District of New York, centers around the misuse of confidential information related to energy contract trades on ICE Futures US.
According to the CFTC’s complaint, between August 2013 and May 2014, Gizienski improperly used material, non-public information while trading a discretionary account belonging to a friend. While simultaneously brokering trades for other EOX customers, Gizienski allegedly disclosed confidential details – including customer identities, trading activity, and positions – to his friend, violating a duty of trust and confidence.
The CFTC alleges that EOX knowingly allowed Gizienski to trade on behalf of his friend despite a company policy prohibiting discretionary trading, but failed to implement sufficient oversight or procedures to manage the inherent conflicts of interest. Furthermore, the complaint details failures in EOX’s recordkeeping practices dating back to at least 2013, including inadequate policies for handling customer orders, retaining records, and protecting confidential information. These failures reportedly hampered the CFTC’s investigative efforts.
“Illegal use of inside or otherwise confidential information significantly undermines market integrity and harms customers in our markets,” stated James McDonald, CFTC Director of Enforcement, announcing the formation of an Insider Trading and Information Protection Task Force comprised of staff from Chicago, Kansas City, New York, and Washington, DC.
The CFTC is seeking civil monetary penalties, permanent registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC Regulations from both Gizienski and EOX Holdings LLC. The agency also expressed gratitude for the cooperation of the Alberta Securities Commission in the investigation.
Daniel Burstein and Heather are listed as CFTC staff members responsible for the case.
Source: CFTC.gov
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