Nadex bans member over undisclosed criminal history

Maria Nikolova

Kenneth Gilmore failed to timely apprise Nadex that he was a party to a criminal matter.

North American Derivatives Exchange (Nadex), a subsidiary of IG Group Holdings plc (LON:IGG), has published a notice banning one of its members over undisclosed criminal history.

The Nadex Compliance Department launched an investigation into Member Kenneth Gilmore after receiving information from Nadex’s third-party background service regarding his recent criminal history. Specifically, the Compliance Department was notified that Gilmore was indicted by the United States Attorney’s Office for the Western District of Texas on seven counts of wire fraud.

Upon investigation, the Compliance Department discovered that beginning in 2008 and continuing until 2016, Gilmore served as treasurer of the Medina Lake Betterment Association. According to the indictment, beginning in or about 2008 and continuing until in or about 2016, Gilmore devised a scheme to defraud Medina of money by means of false pretenses, representations and promises. Further, the indictment alleged that Gilmore stole approximately $220,000 from Medina and concealed those thefts as part of his scheme.

On April 2, 2019, Gilmore pleaded guilty to one count of wire fraud. On September 4, 2019, Gilmore was sentenced to 27 months in prison followed by a three year period of supervised release, and ordered to pay $177,000.00 in restitution.

During his tenure as a Nadex Member, Gilmore failed to timely apprise Nadex that he was a party to the aforementioned criminal matter and subsequent guilty plea for one count of wire fraud. In addition, Gilmore failed to comply with Nadex’s investigation when he did not respond to the Compliance Department’s request for information regarding the allegations set forth in the subject alert.

Nadex has determined that Gilmore violated Nadex Rules 3.3(d)(ii), and (v) when he failed to timely apprise Nadex of the aforementioned criminal conviction and penalties imposed therein. In addition, the Compliance Department concluded that Gilmore violated Rule 3.3(a) and Member Acknowledgements and Authorizations, Section (h) of the Nadex Membership Agreement when he failed to cooperate with the Compliance Department’s inquiry regarding the relevant criminal conviction.

As a result of the aforementioned violations, Kenneth Gilmore’s Nadex Membership has been revoked, his account terminated, and he has been permanently banned from trading on Nadex Markets, either directly for his own account or through an intermediary, or as an authorized trader on behalf of any other account.

The notice is effective September 14, 2020.

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