Washington, D.C. – Vision Financial Markets LLC has been slapped with a $525,000 penalty by the Commodity Futures Trading Commission (CFTC) for multiple violations related to the segregation of customer funds, the CFTC announced September 27, 2013.
The CFTC order details that Vision, a registered Futures Commission Merchant and broker-dealer, failed to properly segregate commodity and options customer funds between approximately August 2008 and June 2009. The firm also failed to notify the CFTC and its designated self-regulatory organization (DSRO) about its under-segregation and made false statements to the CFTC regarding the location and handling of these funds.
According to the CFTC, Vision used customer funds to purchase securities but did not account for or hold these securities separately as required. Instead, the firm commingled these assets with its own funds and those of its securities customers within a participant account at the Depository Trust Company (DTC). Vision falsely reported to the CFTC that these securities were held in segregated bank accounts, despite internal knowledge to the contrary.
The violations came to light in June 2009, prompting Vision to restate its monthly segregation statements. This restatement deducted the value of the customer funds held at DTC, revealing a six-month period of under-segregation from December 2008 through May 2009. Crucially, Vision failed to report this under-segregation to either the CFTC or its DSRO during that period.
The CFTC order requires Vision to cease and desist from further violations of the Commodity Exchange Act and related regulations, in addition to the $525,000 civil monetary penalty. The case was led by CFTC staff members Candice Aloisi, Laura Martin, Lenel Hickson, Jr., Stephen Jay Obie, Manal Sultan, and Vincent McGonagle, with assistance from Kevin Piccoli and William Tylinski of the Division of Swap Dealer and Intermediary Oversight.
Source: CFTC.gov
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