U.S. Commodity Futures Trading Commission Orders Shahrokh Nikkhah to Pay a $200,000 Civil Monetary Penalty in Fraudulent Trade Allocation Case
WASHINGTON, DC -- The U.S. Commodity Futures Trading Commission (CFTC) today announced the issuance of an order requiring Shahrokh Nikkhah to pay a $200,000 civil monetary penalty, and accepted Nikkhah’s payment of the penalty, which made final an administrative decision finding that Nikkhah had engaged in fraudulent trade allocation. Nikkhah is also subject to a cease and desist order and a 10-year trading ban.
The CFTC’s original enforcement action alleged, among other things, that Nikkhah fraudulently allocated executed trades among accounts he controlled, falsely assured at least one customer that there would be no additional losses in the customer's account, and wrongly transferred executed trades from one customer's account to another’s. The CFTC upheld findings by an Administrative Law Judge that Nikkhah had engaged in fraudulent trade allocation, as well as the imposition of a trading prohibition and cease and desist order. However, the CFTC found that the gravity of Nikkhah’s violations warranted a $200,000 civil monetary penalty as well.
The CFTC ordered subsequent proceedings on the issue of Nikkhah’s net worth. Those proceedings had not yet concluded in August 2005, when Nikkhah tendered a check to the CFTC for $200,000. Regarding the pending net worth inquiry, the Commission’s order imposing the civil monetary penalty and accepting payment of the penalty states that, “Nikkhah’s submission of a check in the amount of the proposed penalty forecloses the need for further inquiry.” With the resolution of the issue of the civil penalty, the CFTC’s liability findings and the imposition of the cease and desist order and the 10-year trading prohibition by the ALJ are now final and in effect.
The following CFTC Division of Enforcement staff were responsible for this case: Alan Edelman, Erin Vespe, Rosemary Hollinger, Susan Bovee, Gretchen L. Lowe, and Vince McGonagle.
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The CFTC encourages members of the public to bring to our attention any suspicious activities involving futures or commodity options, including matters involving foreign currency (forex) investments or suspicious Internet websites.
You may contact the CFTC at 1-866-FON-CFTC (1-866-366-2382), visit us at our Customer Protection web page (www.cftc.gov/cftc/cftccustomer.htm), or fill out our Internet Report Form identifying your concerns (www.cftc.gov/enf/enfform.htm).
In addition, the CFTC publishes a series of Consumer Advisories at http://www.cftc.gov/cftc/cftccustomer.htm#advisory alerting the public to warning signs of possible fraudulent activity and offering precautions individuals should take before committing funds.
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