Ex-Classic Energy broker Lee Tippett pays over $1 million to settle kickback charges

Rick Steves

“The CFTC will vigorously pursue and take action to stop corruption among brokers and other intermediaries that facilitate trading in the derivatives markets, whether they are making illegal kickback payments or misappropriating nonpublic information. Today’s action demonstrates that the CFTC is committed to taking action against all individuals who engage in such conduct.”

The Commodity Futures Trading Commission has charged Lee Tippett, a former energy broker with Classic Energy, LLC, for participating in a scheme to pay kickbacks to Matthew Clark, a trader employed by one of Classic’s brokerage customers.

Kickback payments to Clark where allegedly made in exchange for Clark sending more brokerage business from his employer to Classic.

Lee Tippett also participated in a scheme to misappropriate confidential block trade order information from the same Classic customer, facilitated fictitious trades, and made false statements to ICE Futures US, according to the CFTC complaint.

Lee Tippet to return $695,000 in ill-gotten gains plus $500,000 fine

Acting Director of Enforcement Gretchen Lowe at CFTC, said: “The CFTC will vigorously pursue and take action to stop corruption among brokers and other intermediaries that facilitate trading in the derivatives markets, whether they are making illegal kickback payments or misappropriating nonpublic information. Today’s action demonstrates that the CFTC is committed to taking action against all individuals who engage in such conduct.”

The order requires Lee Tippett to disgorge $695,000 in ill-gotten gains, imposes a $500,000 civil monetary penalty, permanently bans Tippett from trading commodity interests, and requires him to comply with undertakings never to apply for registration or engage in any activity requiring registration with the CFTC.

The CFTC said that Classic Energy hired Lee Tippett – a longtime associate of Clark – as a broker in November 2015 for the purpose of facilitating kickback payments to Clark. Lee Tippett had no experience as a broker prior to being hired by Classic.

As part of this kickback scheme, Tippett would broker natural gas futures block trades for Clark’s employer, but would pay most of the commission income he earned on these trades back to Clark in exchange for Clark sending more brokerage business to Classic.

From 2015 to 2019, Tippett paid Clark approximately $3,185,775 by sending cash directly to Clark’s family members or by transferring money to shell companies set up by Clark. Tippett kept $695,000 of this commission income for himself.

Read this next

Retail FX

Banxso announces 8.7% interest rate on deposits in South Africa

“With Banxso, they can enjoy the benefits of both worlds – earning competitive interest and having the freedom to trade, all within the same platform.”

Industry News

FINRA to publish transaction details in U.S. Treasury securities

“Consistent with our longstanding practice, FINRA is introducing greater transparency in a calibrated and careful manner, benefiting liquidity and resilience in this critical market while also mitigating potential information leakage concerns.”

Institutional FX

OpenYield launches “cheap and easy” fixed income trading for brokers

“We’re on a mission to make bonds cheap and easy to trade, and are excited about the opportunity to build generational capital markets infrastructure.”

Digital Assets

Sumsub and Mercuryo publish a guide for VASPs: “Mastering Travel Rule Compliance”

“At Sumsub, we’ve concentrated our efforts on filling the gap in understanding the complexity of Travel Rule regulation and helping organizations find the best solution to stay safe and compliant while minimizing costs and avoiding potential risks of non-compliance. This guide we created with Mercuryo, our trusted partner, is the ultimate navigation tool all VASPs can consult.”

Digital Assets

Bitget Wallet Leads with Record Swap Volume & New Crypto Innovations

This week, Bitget Wallet achieved a milestone by surpassing Metamask with a record 388,757 Swap order transactions, securing the global lead. The significant 7-day trading volume, almost 68,000 more than its rival, underscores its liquidity and user trust. This robust activity signals Bitget Wallet’s prominent role and reliability in the dynamic crypto market.

Digital Assets

Embarking on a Digital Currency Journey

Imagine you’ve stumbled upon a treasure map, leading you to untold riches hidden in the vastness of the internet. Instead of gold coins and jewel-encrusted goblets, this treasure comes in the form of digital currencies, the modern-day loot coveted by many.

Reviews

Traders Union Experts Share The Trading Analyst Review For 2024

Navigating options trading in rapidly shifting markets poses a considerable challenge. This is where options trading alert services become invaluable. They aid traders in keeping abreast of evolving opportunities and market trends. In this assessment, Traders Union experts scrutinize The Trading Analyst alert service to ascertain its efficacy. 

Digital Assets

BlockDAG’s Presale Achieves $9.9M: Aiming For A 5000-Fold ROI As Cardano’s Price Rises And Fantom Launches Sonic

Explore Cardano’s surge, Sonic’s efficiency, and why BlockDAG’s growth makes it the top crypto choice. A deep dive into the future of blockchain investments.

Digital Assets

US, UK probe $20 billion Tether transfers tied to Russian exchange.

U.S. and UK authorities are investigating the movement of $20 billion in the USD-pegged stablecoin tether (USDT) through Moscow-based exchange Garantex.

<