CHICAGO, IL – Christopher T. Foufas, Maksim Baron, and William K. Kerstein, all Chicago-area floor brokers at the Chicago Mercantile Exchange (CME), have been penalized by the U.S. Commodity Futures Trading Commission (CFTC) for illegal trading practices, authorities announced July 26, 2012. The charges stem from manipulative actions involving S&P 500 Stock Price Index futures contracts.
The CFTC found that between May 2009 and October 2010, Foufas engaged in “bucketing” – indirectly taking the opposite side of his customers’ orders for his own account through pre-arranged, non-competitive trades. Specifically, Foufas allegedly filled customer orders while simultaneously executing round-turn trades with other brokers, allowing him to establish a position without fair market competition. He faces a $75,000 civil penalty and an 18-month ban from filling or executing customer orders. His floor registration has also been suspended for two months.
The investigation also revealed that Kerstein and Baron aided another broker in executing the same manipulative scheme. Kerstein accommodated the broker on seven occasions, while Baron did so on four. Kerstein will pay a $50,000 penalty and receive a one-month suspension of his floor registration. Baron faces a $20,000 penalty and a two-month suspension.
All three traders are required to cease and desist from further violations of the Commodity Exchange Act and CFTC regulations. The CFTC’s Enforcement Division worked in conjunction with the CME’s Market Regulation Department throughout the investigation. The penalties aim to ensure the integrity of the S&P 500 futures market and protect investors from manipulative trading practices.
Source: CFTC.gov
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