WASHINGTON, DC – Summit Energy Services, Inc. will pay $140,000 to settle charges of operating as an unregistered Commodity Trading Advisor (CTA), the Commodity Futures Trading Commission (CFTC) announced today, January 16, 2015. The company, a Delaware corporation based in Louisville, Kentucky, was found to have violated the Commodity Exchange Act.
According to the CFTC’s order, from October 2012 through September 25, 2014, Summit Energy advised more than 15 clients on trading futures contracts and over-the-counter (OTC) natural gas swaps, and marketed itself as a CTA without proper registration. The firm offered “risk management” services through its website and promotional materials, specifically advising clients on the value and advisability of trading in natural gas swaps and futures.
Most of Summit Energy’s clientele consisted of commercial entities with established energy needs, purchasing physical natural gas and electricity. The CFTC determined that Summit Energy also acted as a broker in OTC natural gas swaps for some clients, and that its trading advice wasn’t incidental to its business but a core component of its services.
In addition to the $140,000 civil monetary penalty, the CFTC has ordered Summit Energy, along with its parent companies, affiliates, and successors, to cease and desist from any further violations of CTA registration requirements. The National Futures Association assisted the CFTC in the investigation.
The case was led by CFTC staff members Amanda L. Olear, Kevin Piccoli, W. Derek Shakabpa, Judith M. Slowly, Trevor Kokal, David Acevedo, Lenel Hickson, Jr., and Manal M. Sultan. Dennis Holden is the media contact for this matter.
Source: CFTC.gov
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