Des Moines, IA – The Commodity Futures Trading Commission (CFTC) has settled charges against Lauren Kaemingk, Bradley Kooima, and their firm, Kooima & Kaemingk Commodities, Inc. (K&K), for fraud, unauthorized trading, and obstruction of an investigation into market manipulation. The case, filed September 26, 2018, centers around deceptive practices impacting farmers who utilized the firm as an intermediary for live cattle futures contracts.
The CFTC alleges that K&K, through Kaemingk and another employee, engaged in unauthorized trading that resulted in approximately $11.9 million in losses for their customers – primarily individual farmers and large agricultural operations – between January 2012 and February 2016. The firm is accused of fraudulently soliciting customers and opening accounts without proper authorization.
Adding to the charges, the CFTC found that Kaemingk actively attempted to conceal the extent of the unauthorized trading when the CME Group Inc. (CME) began investigating a prior position-limit violation by a former employee. According to the Order, Kaemingk encouraged a customer to withhold information from the CME and made misleading statements during an interview with exchange officials.
As part of the settlement, K&K, Kaemingk, and Kooima are collectively required to pay $11,920,857.05 in restitution to affected customers. They will also pay a $1.25 million civil monetary penalty. The Order mandates that all parties cease and desist from any further violations of the Commodity Exchange Act and related CFTC regulations.
“Many farmers depend on the futures markets to help protect their operations from financial uncertainty,” stated James McDonald, CFTC Director of Enforcement. “Those farmers should be able to trust that their Introducing Broker will deal with them honestly… When brokers defraud their customers and then seek to cover it up — as in this case — the Commission will vigorously pursue them.”
The CME has also issued a separate disciplinary action, imposing a $1.25 million fine on K&K, Kaemingk, and Kooima, which the CFTC considered when determining its own penalty. The CFTC acknowledged the assistance provided by both the CME and the National Futures Association throughout the investigation.
Source: CFTC.gov
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