TFS-ICAP’s former Global Head of Emerging Markets broking argues against CFTC complaint

Shortly after Jeremy Woolfenden, former Global Head of Emerging Markets broking at TFS-ICAP, made clear his intentions to move to dismiss the case against him brought by the United States Commodity Futures Trading Commission (CFTC), the defendant has submitted a Letter with the New York Southern District Court detailing his arguments on why the case against him has to be nixed for lack of personal jurisdiction.

Let’s recall that, according to the CFTC, the New York Southern District Court has personal jurisdiction over Mr Woolfenden because his actions caused the underlying misconduct at issue in this case – flying & printing trades. TFS-ICAP brokers made misrepresentations to US-based clients because they had been trained and encouraged to do so by Mr Woolfenden. Though Mr. Woolfenden lived in London, as the Global Head of Emerging Markets FX Options he directly supervised and managed these US- and London-based brokers through at least mid-August 2015. Moreover, he registered with the CFTC in the United State as an associated person of two CFTC-registered entities.

In the latest filing with the New York Southern District Court, the defense counsel for Mr Woolfenden argues it is unfair and unreasonable to force Mr. Woolfenden, who is out of work in the United Kingdom, to go through years of expensive and burdensome overseas litigation in the United States – a forum to which he has virtually no ties.

In addition, the defense notes that the review of Mr. Woolfenden’s conduct is appropriately being done by the UK Financial Conduct Authority, whose investigation remains ongoing.

The letter also explains that during a telephone conference on April 5, 2019, counsel for the CFTC focused specifically on a set of allegations in the CFTC’s Complaint against Mr. Woolfenden. These allegations, according to the defense counsel, are insufficient.

The CFTC asserts that Mr. Woolfenden was part of U.S. management because TFS- ICAP, Ltd, Mr. Woolfenden’s employer, was part of a US company, TFS-ICAP, LLC. The CFTC, the defense counsel notes, cites no case law in support of this position.

“Mr. Woolfenden is not TFS-ICAP, and his participation in managing others in the U.K. as part of TFS-ICAP does not transmogrify his work in the United Kingdom into personal jurisdiction in the United States”, the defense argues.

The CFTC relies on the fact that Mr. Woolfenden registered as an Associated Person with the CFTC. But this argument is played down by the defense. They claim the CFTC cites no case to support the proposition that CFTC registrants are automatically subject to personal jurisdiction.

Finally, the CFTC alleges that, on at least one occasion, in 2015, Woolfenden explicitly directed a TFS-ICAP broker to ‘never admit to clients that we have ever flown rates.’ That allegation, according to the defense, is conspicuously silent as to whether the alleged flying had anything to do with the United States or whether Mr. Woolfenden’s statement was directed to the United States. Moreover, even if the statement were somehow connected to the United States, a singular act such as that would not be enough – even in combination with the other generalized allegations – to warrant personal jurisdiction over Mr. Woolfenden.

The case continues at the New York Southern District Court.