Cunningham Commodities Failed to Supervise Unregistered Broker
The Commodity Futures Trading Commission (CFTC) recently entered an order settling charges against Cunningham Commodities, LLC, a registered futures commission merchant, for failing to properly supervise accounts brought to the firm by an introducing broker. Notably, Cunningham Commodities guaranteed the introducing broker’s activities from March to December 2019. The CFTC’s Order does not reveal the introducing broker’s identity.
According to the Order, Cunningham Commodities’ supervision of the introducing broker’s accounts was not adequate. The Order finds that Cunningham Commodities agreed to guarantee the introducing broker’s activities even though it knew the introducing broker offered an options trading program to customers without being registered as a commodity trading advisor. The Order further finds that Cunningham Commodities knew most customers lost money under the trading program. The Order finds that many customers were senior citizens, and their retirement account funds were traded.
The Order also finds that Cunningham Commodities learned that the National Futures Association believed the introducing broker was deceptively soliciting investors to invest in a program that consistently lost money for almost all customers, but failed to take proper action. The Order further finds that Cunningham Commodities never listened to recorded calls of the introducing broker’s solicitations, even as customer accounts were dropping in value.
The Order requires Cunningham Commodities, as a result of its failed supervision, to pay a $250,000 civil monetary penalty. The order also finds that Cunningham Commodities is liable for any restitution or disgorgement obligations imposed against the introducing broker in any CFTC enforcement proceeding, up to $640,000.
If you held accounts with Cunningham Commodities, you may have legal claims, especially if you lost money in an options trading program implemented by the unregistered introducing broker. Please contact one of our Business Trial Group attorneys at 800-816-1031 to further discuss your claims.
The Business Trial Group at Morgan & Morgan will never charge hourly fees or expensive retainers. We are only paid if we successfully recover money for you.
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