CFTC charges former energy company President for insider trading and kickbacks fraud
Clark allegedly engaged in a fraudulent scheme in which he received kickbacks from the brokerage commissions paid by his employer to a voice broker, Classic Energy LLC.
The Commodity Futures Trading Commission has pressed charges against Matthew Clark of Houston, Texas.
He is the former President of an energy company is charged for misappropriating confidential natural gas block trade order information from his employer and directing natural gas block trades to a brokerage firm in exchange for a share of the brokerage commissions charged to his employer for these trades.
The complaint, which also charges Clark with making false statements to the CFTC, was filed in the U.S. District Court for the Southern District of Texas and the regulator seeks monetary penalties, disgorgement, restitution, registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations.
Insider trading, kickbacks, and false statements
“Markets thrive on competition, and non-competitive behavior in the market is wrong, illegal and will be aggressively pursued by the CFTC. There is no place in the markets for people who participate in or benefit from the misappropriation of confidential information,” said Chairman Rostin Behnam.
“The CFTC will continue to aggressively pursue all individuals who participate in or benefit from the misappropriation of confidential information and engage in fictitious or noncompetitive trading. Further, the CFTC will not tolerate and will pursue those who lie to the CFTC or the exchanges to conceal their fraudulent activity”, said Acting Director of Enforcement Vincent McGonagle.
The wrongdoing took place between August 6, 2015, and December 28, 2018, according to the CFTC, who claims Clark disclosed his employer’s confidential natural gas block trade order information to individual trader Peter Miller, who would execute non-competitive, fictitious block trades with Clark as well as other trades designed to profit from the information disclosed by Clark.
In exchange, Miller shared with Clark his profits from trading on this information, the agency alleged. Miller was also charged for his role in this scheme.
The CFTC also states that from 2009 through 2019, Clark engaged in a fraudulent scheme in which he received kickbacks from the brokerage commissions paid by his employer to a voice broker, Classic Energy LLC, a brokerage firm owned and operated by Matthew Webb. In exchange for these commission fee kickbacks, Clark agreed to direct his employer’s trades to Webb’s brokerage.
These kickback payments were disguised by directing the voice broker to hire sham employees and establish various shell companies in the name of family members.