November 20, 2012
Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today announced that Eagle Market Makers Inc. (Eagle) of Chicago, Illinois, agreed to pay a $220,000 civil monetary penalty and $3,475 in disgorgement to settle CFTC charges that it exceeded spot-month position limits in corn futures and failed to diligently supervise its traders. Eagle is currently registered with the CFTC as a Futures Commission Merchant, a Commodity Pool Operator, and a Commodity Trading Advisor, according to the order.
The CFTC order finds that on April 29, 2009, Eagle exceeded spot-month corn futures speculative position limits by having a net short position of 878 May 2009 Chicago Board of Trade (CBOT) corn futures, which exceeded the speculative position limit by 278 contracts. Eagle’s profits from the corn futures contacts that exceeded position limits were $3,475.
The order also finds that Eagle failed to diligently supervise its traders with respect to compliance with speculative position limits. According to the order, Eagle never conducted any training of its traders with respect to speculative position limits, notwithstanding the fact that Eagle had received two CBOT warning letters for spot-month corn futures position limit violations prior to the violations found in the CFTC order. Eagle also received a CBOT cease and desist order for violating wheat futures speculative position limits.
In addition to ordering disgorgement and imposing a civil monetary penalty, the CFTC order requires Eagle to cease and desist from further violations of Section 4a(b)(2) of the Commodity Exchange Act and CFTC regulations 150.2 and 166.3, as charged.
The CFTC acknowledges the assistance of the Chicago Mercantile Exchange (CME) in this matter.
CFTC Division of Enforcement staff members responsible for this action are W. Derek Shakabpa, Judith M. Slowly, Trevor Kokal, David Acevedo, Lenel Hickson, Jr., Stephen J. Obie, and Vincent A. McGonagle.
Last Updated: November 20, 2012