CFTC secures Court order against eFloorTrade
The defendants are enjoined from registering with the CFTC or acting as a principal of any person registered with the CFTC for five years.
The United States Commodity Futures Trading Commission (CFTC) has obtained a Court order against introducing broker eFloorTrade and the firm’s owner John Moore. On April 3, 2020, Judge Paul G Gardephe of the New York Southern District Court signed an Opinion & Order in this case.
Let’s recall that this is a civil enforcement action brought by the CFTC. The regulator alleges that, between October 2010 and October 2015, the defendants (1) made false or misleading statements to the CFTC; (2) failed to keep and produce required books and records; (3) failed to make and/or prepare required records; and (4) failed to supervise.
In September 2018, as FinanceFeeds reported, the Court granted the CFTC summary judgment as to liability. The CFTC has then moved for a permanent injunction and civil monetary penalties.
In the Opinion & Order issued on April 3, 2020, the Court grants the CFTC’s motion for injunctive relief to a certain extent. The motion is granted to the extent that the defendants will be (1) permanently enjoined from committing the conduct for which they were found liable; and (2) enjoined from registering with the CFTC or acting as a principal of any person registered with the CFTC for five years.
After considering the evidence and weighing the relevant factors, the Court concludes that it is appropriate to permanently enjoin the defendants from engaging in the conduct for which this Court found the defendants liable in its summary judgment decision. As the Court has previously stated, the defendants’ conduct constitutes “a complete and utter failure to satisfy statutory and regulatory obligations.” And even now the defendants refuse to take responsibility for their actions, blaming their misconduct on the size of the firm and missteps of their deceased lawyer.
Regarding Moore, he does not admit to testifying falsely – despite overwhelming evidence to the contrary – and he downplays the significance of providing false information to federal regulators. Given these circumstances, there is a likelihood that the defendants will repeat their misconduct, the Judge said.
The Court determined that permanent bans are not warranted in this case. Although the defendants’ misconduct was long running and serious, there is no evidence that their customers sustained losses as a result of the defendants’ actions, or that the defendants sought to profit at their clients’ expense, the Judge explained.
The Court concluded that the $1.54 million in penalties sought by the CFTC are excessive. Having considered the aggravating and mitigating factors here, the Court decided to impose penalties of $10,000 each for the five recordkeeping violations and three supervisory violations – for a total penalty of $80,000.
As to the three false statement charges against Moore, the Court decided to impose a total civil monetary penalty of $140,000. This penalty, the Judge said, reflects the serious nature of Moore’s false testimony, but also addresses Moore’s ability to pay and the fact that the three false statement charges concern a single subject – the non-existent spreadsheet – and therefore could reasonably be construed as a single violation.