Chicago, IL – Eagle Market Makers Inc. has agreed to pay $223,475 to settle charges brought by the U.S. Commodity Futures Trading Commission (CFTC) related to violations of speculative position limits and failures in supervisory practices, according to an order released November 20, 2012.
The CFTC found that on April 29, 2009, Eagle exceeded the established speculative position limits for May 2009 Chicago Board of Trade (CBOT) corn futures contracts. The firm held a net short position of 878 contracts, surpassing the limit by 278 contracts. This resulted in profits of $3,475 attributed to the excess positions.
The order details a pattern of inadequate oversight. Eagle reportedly failed to provide any training to its traders regarding speculative position limits, despite receiving prior warning letters from the CBOT concerning similar violations in corn futures. The company had also been issued a cease and desist order by the CBOT for violating wheat futures speculative position limits.
As part of the settlement, Eagle will pay a $220,000 civil monetary penalty and $3,475 in disgorgement, representing the profits gained from the illegal trading activity. The CFTC order also mandates that Eagle cease and desist from any further violations of relevant sections of the Commodity Exchange Act and associated CFTC regulations.
The CFTC acknowledged the support of the Chicago Mercantile Exchange (CME) during the investigation. The case was handled by CFTC Division of Enforcement staff members W. Derek Shakabpa, Judith M. Slowly, Trevor Kokal, David Acevedo, Lenel Hickson, Jr., Stephen J. Obie, and Vincent A. McGonagle.
Source: CFTC.gov
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