New York futures trader Aron Seidenfeld has been ordered to pay $160,000 and is banned from trading for 90 days after being charged by the Commodity Futures Trading Commission (CFTC) with account fraud. The CFTC announced the settlement on Tuesday, stemming from an order filed on September 30, 2019.
The investigation revealed that Seidenfeld, acting as trustee of the Seidenfeld Irrevocable Trust, concealed the trust’s ownership of three corporate entities while opening successive trading accounts with multiple Futures Commission Merchants (FCMs). This occurred after the first entity accrued an approximately $2.1 million unsecured debit.
According to the CFTC, Seidenfeld misrepresented the controlling persons of the corporate entities on account applications and submitted falsified documentation. This documentation was inconsistent with existing records and appeared solely intended to circumvent FCM scrutiny. The purpose of these actions was to prevent the Seidenfeld name, or the trust’s identity, from appearing on FCM paperwork while the $2.1 million debt remained unpaid. Subsequent accounts also incurred losses that were not settled.
The CFTC emphasized that FCMs rely on accurate account application information to manage risk and comply with regulatory obligations, including establishing appropriate risk limits for each customer. Seidenfeld’s misrepresentations hindered this process, potentially increasing the risk of FCM insolvency and disrupting markets.
In addition to the monetary penalty and trading ban, the order requires Seidenfeld to cease and desist from further violations of the Commodity Exchange Act (CEA) and CFTC regulations. The case was led by CFTC staff members Ilana D. Waxman, Daniel C. Jordan, Michael Loconte, and Rick Glaser.
Source: CFTC.gov
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