ORLANDO, FL – Jon P. Ruggles of Orlando, Florida, has been ordered to pay $5.25 million in penalties and disgorgement for engaging in fraudulent trading practices, the Commodity Futures Trading Commission (CFTC) announced Friday.
The CFTC filed and settled charges against Ruggles, alleging he conducted fictitious and noncompetitive trades in crude oil, heating oil futures, and RBOB gasoline futures on the New York Mercantile Exchange (NYMEX) between March 2012 and December 2012. At the time, Ruggles was employed in Atlanta, Georgia, and responsible for developing and executing fuel hedging strategies for his employer.
According to the CFTC’s order, Ruggles breached his fiduciary duty to his employer by misappropriating confidential trading information. He then used this information to trade in personal accounts held in his wife’s name, which he controlled, for his own financial gain. On at least 71 days during the period in question, Ruggles reportedly traded the same products in his personal accounts that he was trading for his employer.
The CFTC found that Ruggles strategically sequenced trades in both accounts, prioritizing his personal orders against his employer’s. This allowed him to secure advantageous prices and effectively guarantee execution, circumventing competitive market forces. This practice constitutes both misappropriation of confidential information and fictitious/noncompetitive trading, violating the Commodity Exchange Act (CEA) and CFTC Regulations.
As a result of the settlement, Ruggles must disgorge $3,501,306 in ill-gotten gains and pay a civil monetary penalty of $1.75 million. He is also permanently banned from trading commodities and registering with the CFTC.
“The misappropriation of confidential, nonpublic information is fraud… and undermines the integrity of the derivatives markets,” said CFTC Director of Enforcement Aitan Goelman. “We will continue to be vigilant in clamping down on such abuses.”
The CFTC investigation was led by staff members Kara Mucha, James Humphrey IV, Kassra Goudarzi, Steven Kim, Jordon Grimm, Michael Solinsky, Thomas Simek, and Charles Marvine.
Source: CFTC.gov
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