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The US Commodity Futures Trading Commission (CFTC) said on Wednesday it has filed a civil enforcement action with the US District Court for the Southern District of New York against eFloorTrade LLC, a registered options and futures introducing broker (IB), and its principal John Moore, charging them with recordkeeping and supervision failures. In addition, Moore was also charged with presenting false and misleading statements in a sworn testimony before the CFTC.
The CFTC asks the Court to order disgorgement, civil monetary penalties, trading and registration bans, and permanent injunctions against further violations of the regulations.
According to the CFTC complaint, eFloorTrade failed to keep complete and systematic records of dealing transactions, a written record of customer orders, and e-instructions it had received for customers who subscribed to third party trading systems for a five-year period from October 2010 to about October 2015. In addition, the broker failed to keep all emails relating to its business of dealing in commodity interest transactions.
eFloorTrade and Moore failed to diligently supervise the handling of customers’ trading accounts employees and agents. The brokerage failed to adopt adequate procedures on how to handle its customers’ margin deficiencies as it did not ensure that policies and procedures were in place to make and keep books and records, as required by the CFTC.
In addition to the above-listed offenses, Moore has also been charged with providing statements that he knew or reasonably should have known were false and misleading while testifying under oath during a hearing that took place on September 18, 2015. More told the CFTC that he, or another eFloorTrade employee working under his direct supervision, created and maintained spreadsheets relating to trades executed on behalf of customers whose orders were generated from trading instructions received from third party trading system providers. However, the regulator later found that this was not true and Moore admitted there were no such records.
Florida-based eFloorTrade is registered with the CFTC as an Introducing Broker and is a member of the US National Futures Association (NFA). It is an independent IB which product portfolio consists of futures, commodities, and options on futures and commodities, as well as alternative investments, auto trading, electronic trading, systematic trading, and managed investments.
To see the CFTC’s complaint, please click here.