CHICAGO, IL – October 9, 2014 – Kent Woods, a former floor broker at the Chicago Board of Trade (CBOT), is facing charges of recordkeeping fraud and unauthorized trading, the U.S. Commodity Futures Trading Commission (CFTC) announced today. The CFTC issued an order detailing the charges and settled them concurrently.
According to the CFTC, Woods, of Chicago, Illinois, habitually failed to properly record customer order instructions from at least January 2009 through November 2012. He allegedly executed trades – specifically in soybean commodity futures – without receiving specific instructions from customers regarding the amount or type of commodity to be traded. This practice occurred even without documented power of attorney allowing him to exercise such discretion.
The investigation revealed Woods and his staff at Futures International LLC (FI), a Chicago-based Introducing Broker where Woods was a principal, often documented orders *after* they were executed. Co-workers allegedly pre-timestamped blank order tickets, which were then used to falsely represent compliance with recordkeeping requirements. These altered tickets were submitted to the CBOT, violating the Commodity Exchange Act (CEA).
Furthermore, Woods allegedly used instant messages to conduct business but failed to maintain complete records of those communications. FI and its Chief Operating Officer, Amadeo Cerrone, also face charges in a separate civil complaint filed in the U.S. District Court for the Northern District of Illinois, alleging similar recordkeeping violations. The lack of complete records hampered the CFTC’s investigative abilities.
The CFTC order also states that Woods failed to implement adequate compliance procedures at FI and did not properly supervise employees to ensure adherence to federal commodities laws. While specific penalties for Woods were not detailed in the initial release, the charges represent serious violations of CFTC regulations. The civil complaint against Futures International LLC and Amadeo Cerrone is ongoing.
Source: CFTC.gov
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