Jump to navigation

Free Newsletter Modern Trader Follow

Main menu

  • Futures
    • Modern Trader Magazine
    • Commodities
    • Futures Mag Archives
    • ETFs
    • Financials
    • Forex
    • Managed Funds
    • Market Analysis
    • News
    • Options
    • Regulation
    • Technology
    • Trading Strategies
    • Education
    • Futures Op-Ed
  • Favorites
    • Alpha Pages Most Popular
    • Futures Magazine
    • Modern Trader Magazine
    • Most Popular
    • Slideshows & Lists
    • Special Topics
      • Alpha Hunters
      • Bad Boys
      • FINtech
      • High-Frequency Trading
      • Trader's Life
      • Trading Strategies
      • FUTURES MAG's 500th ISSUE
      • We asked traders
  • Traders
    • Market Data
    • Hot Charts
    • Interactive Charts
    • Trading Calendar
  • FINalternatives
  • Hard Assets
    • Home
    • Base Metals
    • Precious Metals
    • Rare Earth Metals
    • Commodities
    • Mining Investments
    • Slideshows
  • Modern Trader
    • Subscribe
    • Past Issues
  • All +
    • Follow Us +
      • FuturesMag
      • Newsletters
      • Facebook
      • Google+
      • Linkedin
      • Twitter
      • RSS Feeds
    • About Us +
      • About
      • Advertise
      • Contact
      • Contribute
      • Privacy Policy
  • !
Follow Futures          
       
more >>

We Asked Traders

Top things I learned about life while day trading millions

Sponsored Content

Trading

Equities.com launches unlimited trading via Tradier Brokerage, Transforming into a news & fintech portal

Featured Topics

more Commodities>>

Commodities

A Saudi-Iran oil war could break up OPEC
Advertisement
more Volatility>>

Volatility

Implied vs. Realized Volatility & the VIX
more Financials>>

Financials

Making drones work for you
more Financials>>

Financials

Perspective: S&P 500 short side off highs

R.J. O’Brien sanctioned $300,000 for supervision violations

Related losses allegedly amounted to $183,000

By Press Release

January 2, 2013 • Reprints

The following is from the CFTC...

The U.S. Commodity Futures Trading Commission (CFTC) today issued an order filing and settling charges against R.J. O’Brien & Associates, LLC (RJO), of Chicago, Ill., a registered Futures Commission Merchant, for failing to diligently supervise its employees in connection with the handling of commodity futures orders of a Guaranteed Introducing Broker (GIB) of RJO and the GIB’s Associated Person (AP), sole principal, and owner. 

The CFTC order finds that, from at least January 2003 through February 2007, the GIB’s AP engaged in an unlawful trade allocation scheme for his personal benefit and to the detriment of both the GIB’s customers and a commodity futures pool operated by the AP through accounts held at RJO.  The AP was able to allocate trades post-execution, allocating the more profitable trades to his personal accounts, and the unprofitable, or less profitable trades to either the GIB customer accounts or the pool account, the order finds.  The GIB’s and AP’s customers sustained losses of up to $183,000, according to the order.

In addition, RJO failed to follow procedures it had in place concerning the placement of bunched orders by account managers, the order finds.  For example, RJO failed to ensure that it always received a post-allocation plan prior to, or contemporaneously with, the GIB’s AP’s filing of bunched orders.  The order also finds that RJO did not employ adequate procedures to monitor, detect, and deter unusual activity concerning trades that were allocated post-execution, or for supervision of its employees’ handling and processing of bunched orders.  By such acts, RJO failed to diligently supervise the handling of customer orders in violation of CFTC regulation 166.3, 17 C.F.R. § 166.3 (2011).

The CFTC order imposes a $300,000 civil monetary penalty and requires RJO to cease and desist from further violations of CFTC regulation 166.3, as charged.

CFTC Division of Enforcement staff was responsible for this case are Kevin S. Webb, Michelle S. Bougas, Heather N. Johnson, James H. Holl, III, Gretchen L. Lowe, and Vincent A. McGonagle.

R.J. O'Brien released the following statement yesterday:

"RJO is committed to the highest standards, not only for those employed by the firm but by extension, its introducing brokers. This Order pertains to the misconduct of a single individual at an introducing broker which has not cleared trades through RJO since February 2007. Once the misconduct was discovered, RJO worked cooperatively with both the National Futures Association and the CFTC to resolve this matter amicably.  RJO undertook its own investigation and determined, in 2009, to return approximately $183,000 to customers who may have been affected.  Moreover, in the past five years, RJO has taken substantial measures to strengthen its compliance and supervisory systems firm-wide.  RJO does not believe that any similar misconduct could occur under its present compliance regime.

About the Author

Related Articles
CFTC Wins Trial against Virtual Currency Fraudster
CFTC Chairman Giancarlo names Matthew A. Daigler senior counsel
Fed tightens a quarter in Yellen's last meeting
CFTC obtains consent order against California firm for fraud
MF Global is gone, but Corzine may return
Previous
Former Citigroup proprietary trader Salomon to start hedge fund
Next
Market powers higher, but indicator confirmation is mixed
Related Terms
cftc 944U.S. Commodity Futures Trading Commission 658Illinois 599National Futures Association 316CFTC Division of Enforcement 152Sanctions 51Vincent A. McGonagle 27Gretchen L. Lowe 22RJO 16Brien & Associates LLC 8III 8James H. Holl 6Supervision 4supervisory systems 2Michelle S. Bougas 2rj obrien 1AP 1Heather N. Johnson 1Kevin S. Webb 1

Free Newsletter Modern Trader Follow

Main menu

  • Futures
    • Modern Trader Magazine
    • Commodities
    • Futures Mag Archives
    • ETFs
    • Financials
    • Forex
    • Managed Funds
    • Market Analysis
    • News
    • Options
    • Regulation
    • Technology
    • Trading Strategies
    • Education
    • Futures Op-Ed
  • Favorites
    • Alpha Pages Most Popular
    • Futures Magazine
    • Modern Trader Magazine
    • Most Popular
    • Slideshows & Lists
    • Special Topics
      • Alpha Hunters
      • Bad Boys
      • FINtech
      • High-Frequency Trading
      • Trader's Life
      • Trading Strategies
      • FUTURES MAG's 500th ISSUE
      • We asked traders
  • Traders
    • Market Data
    • Hot Charts
    • Interactive Charts
    • Trading Calendar
  • FINalternatives
  • Hard Assets
    • Home
    • Base Metals
    • Precious Metals
    • Rare Earth Metals
    • Commodities
    • Mining Investments
    • Slideshows
  • Modern Trader
    • Subscribe
    • Past Issues
  • All +
    • Follow Us +
      • FuturesMag
      • Newsletters
      • Facebook
      • Google+
      • Linkedin
      • Twitter
      • RSS Feeds
    • About Us +
      • About
      • Advertise
      • Contact
      • Contribute
      • Privacy Policy
  • !
images