Washington, D.C. – Commodity broker Chad Henderson and his firm, Prime Agricultural Investors, Inc. (Prime), have been slapped with penalties by the Commodity Futures Trading Commission (CFTC) for a scheme involving the improper allocation of customer trades. The CFTC alleges that Henderson, a Principal and Associated Person of Wisconsin-based Prime, illicitly transferred profitable trades to his own account while simultaneously shifting his losing trades to unsuspecting customers between January 2018 and September 2019.
The scheme allowed Henderson to pocket profits that rightfully belonged to his clients and avoid personal losses, according to the CFTC order. As a result of these violations of the Commodity Exchange Act (CEA) and related regulations, Henderson will pay a $300,000 civil monetary penalty and is permanently barred from trading customer funds in connection with commodity interests.
Prime Agricultural Investors, Inc. will also face consequences, with a $100,000 civil monetary penalty and a requirement to pay $463,459.65 in restitution to affected customers. The CFTC found that Prime failed to implement adequate internal policies and controls to prevent such fraudulent activity. Specifically, the firm lacked a system requiring independent review of trade transfer requests, and failed to adequately supervise Henderson’s trading practices.
The CFTC acknowledged the cooperation of both Henderson and Prime during the investigation conducted by the Division of Enforcement. The investigation was aided by assistance from the CME Group. The agency emphasized that Prime’s failure to supervise Henderson, combined with the lack of robust trade transfer policies, constituted a failure to supervise under CFTC regulations.
Dmitriy Vilenskiy, Jennifer Blakley, Chrystal Gonnella, Jason Wright, A. Daniel Ullman II, and Paul Hayeck of the CFTC’s Division of Enforcement were responsible for the investigation and prosecution of this case.
Source: CFTC.gov
Related Federal Cases
- John P Fischer, Social Security Benefit Fraud, Wisconsin 2021 · Washington
- Thomas Balsiger, Medicaid Fraud, Wisconsin 2024 · Washington
- Wisconsin Attorney Lands 5.5 Years for $2.3M Fraud Scheme · Washington
- John Doe, Elder Fraud, Wisconsin 2022 · Missouri
- Akira Salinas-Ruiz, Murder of 18-Month-Old, Wisconsin, 2006 · Illinois
