WASHINGTON, D.C. – Aron Seidenfeld, a New York-based futures trader, has been charged with account fraud by the U.S. Commodity Futures Trading Commission (CFTC), the agency announced on October 1, 2019. The CFTC issued an order filing and simultaneously settling charges against Seidenfeld for making material misrepresentations in account opening documents submitted to multiple futures commission merchants (FCMs).
According to the CFTC, Seidenfeld acted as trustee of the Seidenfeld Irrevocable Trust, which owned three corporate entities. These entities opened successive trading accounts at various FCMs. Following an approximately $2.1 million unsecured debit from the first corporate entity’s account, Seidenfeld opened additional accounts under the names of the second and third entities.
The CFTC alleges that Seidenfeld intentionally concealed the trust’s ownership of the corporate entities and misrepresented the controlling persons on account applications. Supporting documentation submitted with these applications contained false information, inconsistencies, and appeared to be fabricated solely for the purpose of securing the accounts. The intent, the CFTC claims, was to shield the Seidenfeld name and the trust’s identity while the $2.1 million debt remained unpaid. These subsequent accounts also incurred losses that were not covered.
FCMs rely on accurate information in account applications to assess risk and comply with regulatory obligations, including setting appropriate limits on customer accounts. Misrepresentations by customers, such as those allegedly made by Seidenfeld, can hinder an FCM’s risk management and potentially lead to insolvency, disrupting markets and harming customers, the CFTC stated.
As a result of the settlement, Seidenfeld is required to pay a $160,000 civil monetary penalty and cease and desist from further violations of the Commodity Exchange Act (CEA) and CFTC regulations. Additionally, he is banned from trading in CFTC-regulated markets and registering with the CFTC in any capacity for 90 days.
The case was led by CFTC Division of Enforcement staff members Ilana D. Waxman, Daniel C. Jordan, Michael Loconte, and Rick Glaser.
Source: CFTC.gov
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