Chicago-based Infinity Futures LLC has been slapped with a $300,000 penalty by the U.S. Commodity Futures Trading Commission (CFTC) for failing to adequately supervise its operations and prevent potential fraud. The CFTC issued its order on September 21, 2012, outlining a pattern of lax oversight that allowed improper handling of customer funds.
According to the CFTC, Infinity’s officers, employees, and agents disregarded clear warning signs indicating that funds belonging to third-party customers were being diverted into a proprietary trading account. The order also revealed that one of Infinity’s customers was operating as an unregistered Commodity Trading Advisor, managing client accounts without the necessary registration with the CFTC or proper power of attorney.
The investigation uncovered significant deficiencies in Infinity’s compliance program. The firm’s compliance manual was reportedly outdated, and associated personnel lacked access to written policies and procedures. Furthermore, Infinity failed to adequately train its staff to identify suspicious account activity and prevent fraudulent practices.
In addition to the $300,000 civil monetary penalty, Infinity Futures LLC is required to disgorge $40,000 in ill-gotten gains. The CFTC order mandates that the firm cease and desist from violating CFTC regulation 166.3. As part of the settlement, Infinity must also engage an outside compliance consulting firm to overhaul its training programs and update its existing compliance procedures.
The CFTC’s enforcement action was led by staff members Robert Howell, Joseph Patrick, Susan Gradman, Brigitte Weyls, Scott Williamson, Rosemary Hollinger, and Richard Wagner. The case highlights the importance of robust compliance programs within the commodity futures industry to protect investors and maintain market integrity.
Source: CFTC.gov
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