Washington, D.C. – Rafael Novales has been slapped with a $50,000 penalty and a five-year industry ban for lying to Commodity Futures Trading Commission (CFTC) investigators, the agency announced Monday.
The CFTC filed and settled charges against Novales for making false and misleading statements during an April 2018 interview concerning an ongoing investigation into his conduct while employed as a registered associated person for a registered introducing broker (IB). According to the CFTC, Novales initially claimed he *always* spoke with and secured explicit authorization from customers before executing trades on their behalf.
However, during later sworn testimony before the Commission, Novales admitted this was untrue. He confessed to, on at least some occasions, simply leaving voicemail messages for customers detailing transaction terms. The IB then executed those trades *without* receiving the customers’ direct approval, a practice that potentially violates trading regulations.
“As this enforcement action shows, the Commission will hold accountable individuals who make false or misleading statements to our investigators,” stated CFTC Enforcement Director James McDonald. “We take this very seriously because it undermines our efforts to help ensure the integrity of the markets we regulate. When questioned by the CFTC in an interview or in sworn testimony, witnesses need to tell the truth.”
The order stipulates Novales is barred from seeking or acting in any capacity requiring registration with the CFTC for five years. The investigation was led by CFTC staff members James Deacon, Kara Mucha, Kevin Samuel, James H. Holl III and Rick Glaser.
The CFTC’s focus on truthful testimony underscores its commitment to market oversight and the importance of accurate information during investigations, agency officials say.
Source: CFTC.gov
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