Salvatore Carmen Russo of Wheaton, Illinois, has been charged with aiding and abetting violations of Commodity Futures Trading Commission (CFTC) regulations, the agency announced May 9, 2016. The charges stem from failures by his former employer, Cunningham Commodities, LLC, a Chicago-based Futures Commission Merchant (FCM).
The CFTC found that Cunningham Commodities failed to immediately report a deficiency in its customer segregated account and a failure to maintain its targeted residual interest amount. The shortfall originated from an operational cash transfer error on March 10, 2014. While the error was corrected the following morning, Cunningham did not notify the CFTC until March 12, 2014, only after being alerted to the $5 million discrepancy by Chicago Mercantile Exchange audit staff.
Russo, as Controller and head accountant, was found liable for aiding and abetting the firm’s failure to report the deficiency, allegedly attempting to conceal the shortfall and delaying notification to the CFTC. Additionally, Cunningham Commodities violated regulations by failing to file required reports for Comex silver futures for approximately six months starting in November 2013, and soybean options for two weeks in July 2014. The firm attributed these failures to an improperly configured software setup by an outside vendor.
As a result of the settlement, Cunningham Commodities and Salvatore Russo were jointly and severally ordered to pay a $150,000 civil monetary penalty. They are also permanently prohibited from further violations of the CFTC Regulations. The CFTC utilizes the reports in question to assess market risks and ensure compliance with agency requirements.
The case was led by CFTC Division of Enforcement staff members Susan B. Padove, Elizabeth M. Streit, Scott Williamson, and Rosemary Hollinger, with support from Margaret M. Sweet and Michael S. Zieff from the Office of Data and Technology.
Source: CFTC.gov
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