HOUSTON, TX – December 10, 2021 – The Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action against Peter Miller, a resident of San Juan, Puerto Rico, alleging insider trading in natural gas futures contracts. The case, filed in the U.S. District Court for the Southern District of Texas, details a scheme spanning from August 2015 through December 2018.
According to the CFTC complaint, Miller received confidential block trade order information from a trader at an energy company who breached their duty of trust. This information was then passed through energy brokers before reaching Miller and his firm, Omerta Capital LLC. Miller allegedly used this non-public information to execute trades, including fictitious block trades in natural gas futures, allowing him to profit from advantageous pricing and strategic sequencing of contracts.
The CFTC alleges that Miller employed a spread trading strategy, capitalizing on the price difference between financially-settled and physically-delivered natural gas futures contracts. By trading on the leaked information, Miller generated over $1.5 million in illicit profits, a portion of which was shared with the energy company trader and the involved brokers. The scheme involved entering into non-arm’s length, fictitious block trades with the energy company itself.
The CFTC is seeking civil monetary penalties, disgorgement of profits, restitution, trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations. Acting Director of Enforcement Vincent McGonagle emphasized the CFTC’s commitment to pursuing those who misuse material, non-public information, both those disclosing it and those trading on it.
The case is being prosecuted by Alison Auxter, Clemon Ashley, Lauren Fulks, Daniel Contrastano, Brandon Wozniak, Thomas Simek, Christopher Reed, and Charles Marvine of the CFTC’s Division of Enforcement.
Source: CFTC.gov
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