New York, NY – June 19, 2015 – Joseph F. Welsh III of Northport, New York, has been penalized by a federal court for attempting to manipulate the settlement prices of palladium and platinum futures contracts traded on the New York Mercantile Exchange (NYMEX). The U.S. Commodity Futures Trading Commission (CFTC) brought the charges, alleging Welsh engaged in manipulative practices while employed as a broker at MF Global, Inc.
Honorable William H. Pauley of the U.S. District Court for the Southern District of New York issued a Consent Order against Welsh, assessing a $500,000 civil monetary penalty. The order also permanently bans Welsh from trading CFTC-regulated palladium and platinum products and enjoins him from violating the anti-manipulation provisions of the Commodity Exchange Act.
According to the court findings, between June 2006 and May 2008, Welsh executed market-on-close orders from Christopher Louis Pia, a former portfolio manager at Moore Capital Management LLC. These orders were specifically designed to exert upward pressure on palladium and platinum prices. Welsh allegedly delayed entering Pia’s large buy orders until the final seconds of the closing periods, intending to artificially inflate the settlement prices of the futures contracts.
This case is connected to previous CFTC actions against Pia and Moore Capital Management. In 2011, Pia was ordered to pay a $1 million penalty and was permanently banned from trading during closing periods, as well as from trading palladium and platinum products. Moore Capital Management, along with its affiliated entities, was collectively fined $25 million in 2010 and faced restrictions on their CFTC registrations, including a two-year trading restriction during closing periods.
The CFTC acknowledged the assistance provided by the CME Group, the parent company of the NYMEX, during the investigation. Welsh is also required to undertake compliance training and report annual completion to the CFTC for five years.
Source: CFTC.gov
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