For Release: September 30, 2009
Washington, DC ― The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing and simultaneous settlement of charges against Cadent Financial Services LLC (Cadent), of Chicago, Ill. for failing to diligently supervise its employees in the handling of a client’s account. Cadent is a registered futures commission merchant.
The CFTC order imposes a $120,000 civil monetary penalty on Cadent. The order also requires Cadent to strengthen its supervisory system for overseeing its associated persons’ (APs), employees’ and agents’ sales solicitations and maintenance of customer accounts.
Specifically, the order finds that, from at least May 15, 2007 until April 1, 2008, Cadent failed to diligently supervise its employees and APs in their handling of the Idylic Solutions Pty. Ltd (Idylic) account. The Idylic account was introduced by New World Holdings LLC (NWH), an introducing broker (IB).
The CFTC order finds that funds held by Cadent in the Idylic account were commingled and not properly segregated from those of a different entity with a similar name: Idylic Solutions Ltd. This failure to properly segregate and account for Idylic’s funds took place in connection with both the receipt and deposit of funds, and the transfer and distribution of funds into and from the Idylic account. According to the order, in each instance, Cadent failed to diligently supervise its APs to ensure that third-party funds were separately accounted for and not commingled with the funds already in the Idylic account, as required by the Commodity Exchange Act. Cadent also failed to ensure that there was proper authorization from the account holder either to accept funds from a third party or to send funds to a third party.
The following CFTC Division of Enforcement staff was responsible for this case: Timothy J. Mulreany, Michael Amakor, Paul Hayeck and Joan Manley.
Last Updated: September 30, 2009