CFTC pushes for summary judgement in case against eFloorTrade

Maria Nikolova

CFTC has argued that the defendants are wrong about the seriousness of their violations.

The United States Commodity Futures Trading Commission (CFTC) today filed a Memorandum in support of its Motion for a summary judgement in the case it had brought against eFloorTrade and the firm’s head John Moore. In short, a summary judgement means that the court will rule without a full trial.

In the document, submitted with the New York Southern District Court, the CFTC notes that the defendants did not rebut the allegations made in the regulator’s complaint. Let’s recall that in September 2016, the CFTC filed a civil enforcement action in the New York Southern District Court against eFloorTrade, LLC and its majority owner and sole principal John Moore, charging them with recordkeeping and supervision failures and charging Moore with making false and misleading statements of material fact, or omitting material facts, in sworn testimony before the CFTC. eFloorTrade, headquartered in Orlando, Florida, is registered with the CFTC as an Introducing Broker, and Moore, also of Orlando, is registered with the CFTC as an Associated Person of eFloorTrade.

In particular, the CFTC Complaint alleges that, from October 2010 to at least October 2015, eFloorTrade failed to keep and produce for inspection full, complete, and systematic records of all transactions relating to its business in dealing in commodity interests. The Complaint further alleges that eFloorTrade failed to prepare a written record of the customer orders that it placed (filled, unfilled, or cancelled) as a result of the trading instructions received. In addition, the Complaint alleges that eFloorTrade failed to keep all emails relating to its business of dealing in commodity interest transactions.

Further, according to the Complaint, on September 18, 2015, Moore knew that certain of his statements to the CFTC while testifying under oath were false and misleading.

The CFTC seeks relief including disgorgement, civil monetary penalties, trading and registration bans, and permanent injunctions against further violations of the CEA and CFTC Regulations, as charged.

In their opposition to the CFTC’s allegations, the defendants claimed that their violations of the regulations and laws were “de minimis”, “not material in nature” and “do not warrant a federal enforcement action”.

The CFTC argued in its Memorandum today:

“Even putting aside that the Defendants are simply wrong about the seriousness of their admitted violations, there are no materiality requirements or “de minimis” exceptions to the recordkeeping provisions of the Act and the Regulations Defendants admitted they violated”.

According to the regulator, the request made by the Defendants is “baseless, frivolous and a waste of the Court’s time and resources”.

The case is captioned U.S. Commodity Futures Trading Commission v. eFloorTrade, LLC et al (1:16-cv-07544).

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