DALLAS, TX – Dennis Weinmann and affiliated firms have been slapped with over $2.9 million in penalties and trading bans following a CFTC lawsuit alleging a fraudulent block trade scheme, the agency announced Wednesday. The U.S. District Court for the Northern District of Texas entered a consent order on March 7 against Weinmann, Coquest Inc., Buttonwood LLC, and Weva Properties Ltd., all based in Dallas.
The CFTC’s October 2021 complaint alleged that Weinmann, owner of Coquest, along with Buttonwood and Weva, misappropriated confidential block trade order information from Coquest’s customers. From May 2015 to September 2019, Weinmann allegedly took the opposite side of over 2,000 customer block trade orders without their knowledge or consent, utilizing accounts he controlled at Buttonwood and Weva.
According to the order, Weinmann profited by trading against his own customers, securing block trade prices unavailable to the general market. He also allegedly misled customers by falsely representing that bids and offers came from third-party traders when, in fact, they originated from accounts he controlled. The CFTC characterized this as a fraudulent misappropriation of material nonpublic information.
The court order mandates the defendants collectively disgorge $496,021 in ill-gotten gains and pay a $2.5 million civil penalty. Weinmann faces a six-month ban from trading and registration, as well as a two-year prohibition from brokering block trades on behalf of others. All defendants are permanently enjoined from violating the Commodity Exchange Act and related CFTC regulations. Additionally, Weinmann and fellow Coquest owner John Vassallo were found liable for failing to adequately supervise customer accounts.
The CFTC acknowledged the assistance of the National Futures Association in the investigation. The case was led by CFTC staff members Douglas Snodgrass, Bryan Hsueh, Nina Ruvinsky, David Terrell, Scott Williamson, and Robert Howell.
Source: CFTC.gov
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