Commodities: USA's CFTF charges Italian with illegal trading
The USA's Commodity Futures Trading Commission has charged an Italian citizen, Carmine Garofalo, with options fraud, engaging in fictitious transactions and breaching CFTF regulations. He is also charged with trading noncompetitively in violation of the Commodity Exchange Act and CFTC regulations.
On 20 April0, 2010, the same day the complaint was filed in the U.S. District Court for the Northern District of Illinois, the Honourable Ronald Guzman entered a restraining order freezing certain of the defendant's assets and prohibiting him from destroying documents and denying CFTC staff access to books and records. The court has scheduled a hearing for 29 April, 2010, on the CFTC’s motion for a preliminary injunction.
The CFTC complaint alleges that on 5 March, 2010, Garofalo engaged in a series of unlawful commodity options transactions involving E-mini S&P 500 and Euro/U.S. Dollar European Style Premium option contracts on the Chicago Mercantile Exchange (CME). Garofalo allegedly fraudulently accessed an account of a Luxembourg-based investment fund and, without permission, executed trades to the investment fund’s detriment.
The Financial Crime Forum : Market Abuse : Singapore June 2010
Through this allegedly unlawful scheme, the CFTC says, Garofalo repeatedly made non-competitive, fictitious trades between his personal account and an account of the investment fund. As a result, Garofalo’s personal account profited by more than USD614,000 through the illegal scheme, while the investment fund’s account lost a corresponding amount, according to the CFTC complaint.
The CFTC thanks the CME Group, Inc., the parent of the CME, and Interactive Brokers, LLC for their assistance.
In its continuing litigation, the CFTC seeks surrender of ill-gotten gains, restitution, civil monetary penalties, trading and registration bans and a permanent injunction against further violations of the federal commodities laws.
Garofalo has never been registered with the CFTC.
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