CHICAGO, IL – August 25, 2011 – Craig A. Taffel, a Chicago-based futures floor broker, has been penalized $180,000 by the U.S. Commodity Futures Trading Commission (CFTC) for operating as an unregistered Futures Commission Merchant (FCM). The CFTC issued an order simultaneously filing and settling charges against Taffel for violating the Commodity Exchange Act.
According to the CFTC’s findings, between March 2008 and March 2010, Taffel acted as an FCM by allowing at least four individuals to place trades through his personal trading account. He executed a minimum of 141 trades, totaling 407 grain futures contracts, on their behalf. These trades were directed to Taffel via instant message, email, and phone calls.
The order details that Taffel created sub-accounts under his personal master account at an FCM, and margined the trades of these individuals using his own funds – effectively extending credit to them. At least three of the individuals involved were employed by Taffel’s corporate clients, tasked with relaying futures orders from their employers directly to Taffel.
The CFTC determined that Taffel violated Section 4d(a)(1) of the Commodity Exchange Act by accepting orders and funds to margin trades without being properly registered as an FCM. The settled order requires Taffel to cease and desist from any further violations of the Act.
The CFTC acknowledged the assistance of the CME Group in the investigation. The case was led by CFTC Division of Enforcement staff members Andrew Ridenour, Jessica Harris, Kenneth McCracken, Rick Glaser, and Richard Wagner.
Source: CFTC.gov
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