Release Number 7786-18
September 14, 2018
CFTC Orders Company that Provided Swaps and Commodity Options Trading Advice to Eligible Contract Participants to Cease and Desist from Acting as an Unregistered Commodity Trading Advisor
Washington, DC – The Commodity Futures Trading Commission (CFTC) today announced that it entered an Order requiring Mobius Risk Group LLC (Mobius), a Texas limited liability company with its principal place of business in Houston, Texas, to pay a $75,000 civil monetary penalty for acting as an unregistered Commodity Trading Advisor (CTA).
The CFTC Order finds that, from in or about October 2012 to August 15, 2018, Mobius, for compensation or profit, engaged in a business that included providing over-the-counter (OTC) swaps and commodity options trading advice. Mobius was required to register as a CTA because it held itself out generally to the public as a CTA. In addition, Mobius was required to register as a CTA because, during the course of the preceding twelve months, it furnished commodity trading advice to more than fifteen persons.
According to the Order, through its website, Mobius publicly offered risk management services to eligible contract participants. During the Relevant Period, Mobius provided some of its clients with advice and recommendations concerning physical commodity trading. Mobius also provided certain clients with advice, reports, and/or analyses concerning the value of or the advisability of trading in OTC swaps and commodity options in oil, natural gas and liquefied natural gas. For example, Mobius provided several clients with trading or hedging strategies which included OTC swaps and/or commodity options for reducing the client’s energy risks.
The Order recognizes that Mobius substantially cooperated in the investigation. As a result, the civil monetary penalty imposed by the CFTC has been substantially reduced. In addition to the civil monetary penalty, the CFTC orders Mobius to cease and desist from further violations of the CTA registration provision of the Commodity Exchange Act. The Order also recognizes that since August 16, 2018, Mobius has been registered with the CFTC as a CTA.
The CFTC staff members responsible for this matter are W. Derek Shakabpa, Alben Weinstein, Patryk J. Chudy, Lenel Hickson, Jr., and Manal M. Sultan of the Division of Enforcement.