HOUSTON, TX – The Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action against Houston resident John Cartwright, alleging he engaged in illegal information fraud between June 2016 and September 2019. Cartwright, an associated person of introducing broker Classic Energy LLC, is accused of leaking confidential client information to a proprietary trader, Peter Miller, for personal gain.
According to the CFTC complaint filed in the U.S. District Court for the Southern District of Texas, Cartwright disclosed material nonpublic information regarding block trades in natural gas futures. He allegedly shared this information exclusively with Miller, who then exploited it through a complex trading strategy involving non-arm’s length, fictitious trades with the original customer.
Miller reportedly used this privileged information to secure advantageous prices for his block trades and maximize profits. Cartwright is accused of legitimizing these trades by falsely confirming their execution to the New York Mercantile Exchange (NYMEX), presenting them as routine brokerage services. The pair then allegedly split the illicit profits.
“Market intermediaries play a vital role ensuring markets for energy derivatives are competitive and liquid,” stated Ian McGinley, Director of Enforcement at the CFTC. “The CFTC vigorously pursues those who use their positions for personal gain by misappropriating their customers’ confidential information.”
The CFTC is seeking monetary penalties, disgorgement of ill-gotten gains, restitution for harmed parties, and trading and registration bans against Cartwright. They are also requesting a permanent injunction to prevent future violations of the Commodity Exchange Act and CFTC regulations. This case builds on previous CFTC actions against Miller and Classic Energy LLC for their involvement in the scheme, as detailed in CFTC Press Releases 8396-21 and 8634-22.
The case is being pursued by Lauren Fulks, Alison Auxter, Thomas Simek, Christopher Reed, Charles Marvine, and former staff member Clem Ashley of the CFTC’s Division of Enforcement.
Source: CFTC.gov
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