New York, NY – April 9, 2008 – The U.S. Commodity Futures Trading Commission (CFTC) has secured a $100,000 civil penalty against Aaristo Commodities and Futures DMCC, and several individuals including Naresh Kumar Jain, for manipulative trading practices. The settlement, entered by the U.S. District Court for the Southern District of New York, permanently prohibits Aaristo from further violations of commodity trading laws.
The CFTC originally filed a complaint on April 5, 2007, alleging that Aaristo, along with Supama International DMCC, Kanta Nath Jain, and Hainke & Anderson Trading LLC, engaged in a scheme to manipulate futures contracts traded on the New York Mercantile Exchange (NYMEX) Globex platform in March and April of 2007. The investigation revealed a pattern of unlawful trading designed to create artificial profits for Aaristo at the expense of other traders.
Specifically, the CFTC found that Aaristo executed a series of transactions involving illiquid and distant-dated futures contracts at prices outside of the normal market range. These trades, conducted over at least six days, resulted in no net change to Aaristo’s overall position but transferred funds between Aaristo’s accounts and those of unsuspecting counterparties – effectively a “money pass.”
The consent order finds Aaristo liable for violating the Commodity Exchange Act’s prohibitions against wash sales, accommodation trades, and fictitious sales, as well as engaging in improper noncompetitive commodity futures transactions. Naresh Kumar Jain, a key figure in the scheme, is included in the settlement. The penalty of $100,000 is intended to deter future manipulative behavior in the commodity markets.
The CFTC acknowledged the assistance of the NYMEX, MF Global Inc. (formerly Man Financial Inc.), and the Emirates Securities and Commodities Authority in the investigation. The case was handled by Sheila Marhamati, Michael Berlowitz, Philip Rix, Manal Sultan, David Acevedo, Lenel Hickson, Stephen Obie, and Vincent McGonagle of the CFTC’s Division of Enforcement.
Source: CFTC.gov
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