WASHINGTON, D.C. – Mark Hendershott, a Wisconsin resident, will pay $75,000 in penalties after the Commodity Futures Trading Commission (CFTC) found he acted as an unregistered commodity trading advisor (CTA). The CFTC issued the order on August 26, 2024.
The investigation revealed that from May 2018 through at least June 2021, Hendershott violated Section 4m(1) of the Commodity Exchange Act by providing advisory services without registering with the CFTC as required. Hendershott operated as a self-employed consultant to farmers, offering advice on hedging crop production using commodity futures contracts.
According to the CFTC’s order, Hendershott provided tailored hedging advice to clients on crops including wheat, soybeans, oats, corn, and lean hogs. He actively sought out new clients within the farming community and charged a flat fee for his services. Hendershott assisted clients in opening accounts with a registered futures commission merchant and even placed trades on their behalf, managing account transfers, margin calls, and credit issues.
Critically, Hendershott did not possess a power of attorney or any formal agreement authorizing him to trade on behalf of his clients. The CFTC determined that Hendershott met the criteria for CTA registration because he held himself out as an advisor, provided advice to more than 15 individuals within a 12-month period, and utilized electronic communication methods like email and the internet in his business.
The case was led by CFTC Division of Enforcement staff members Patrick Daly, Diana Wang, Alben Weinstein, John Buffington, R. Stephen Painter, Jr., Lenel Hickson, Jr., and Manal M. Sultan.
Source: CFTC.gov
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