Chicago, IL – Matthew J. Marcus of California and his company, Tech Power Inc., of Nevada, have been penalized by the U.S. Commodity Futures Trading Commission (CFTC) for manipulating single stock futures transactions. Judge Milton I. Shadur of the U.S. District Court for the Northern District of Illinois issued a Consent Order on June 30, 2016, settling the CFTC’s charges.
Marcus and Tech Power were jointly ordered to pay a $250,000 civil monetary penalty. The order also permanently prohibits them from violating the Commodity Exchange Act and CFTC Regulations. Marcus is additionally banned from trading, soliciting, and registering with the CFTC for five years.
The case originated from a CFTC complaint filed on April 14, 2015. The investigation revealed that between January 28, 2014, and February 5, 2014, Marcus executed a scheme known as a “money pass.” This involved transferring funds from an account held by MetroWest Law Corporation, a Canadian law firm, to Tech Power through 1,248 pre-arranged, non-competitive trades on the OneChicago electronic futures exchange.
The scheme was facilitated by John D. Briner, a disbarred Canadian attorney and owner of the MetroWest account, who provided Marcus with his login credentials and authorized the trades. Marcus primarily traded the two accounts against each other, utilizing nearly simultaneous matching orders in eight thinly traded single stock futures products. This effectively eliminated the possibility of trades with outside parties.
The CFTC found that the majority of Marcus’s trades resulted in losses for MetroWest and gains for Tech Power, unlawfully transferring $390,000 from the Canadian firm to Tech Power. The CFTC’s litigation against Briner and MetroWest is ongoing.
The CFTC acknowledged the assistance of the British Columbia Securities Commission in the investigation. Staff members from the CFTC’s Division of Enforcement, including Diane M. Romaniuk, Lindsey Evans, Melissa Cavers, Heather Johnson, Robert Howell, Scott Williamson, and Rosemary Hollinger, were responsible for the case.
Source: CFTC.gov
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