For Release: January 22, 2008
CFTC Settles Charges against Dubai-Based Supama International DMCC for Engaging in Illegal Trades that Resulted in an Illegal Pass of Money among Accounts
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) announced today that it settled its case against Supama International DMCC (Supama), of Dubai, which had been charged with engaging in trading that resulted in a money pass among Supama’s and counterparty accounts.
The consent order, entered by the Honorable Richard J. Holwell of the U.S. District Court for the Southern District of New York, stems from a complaint filed by the CFTC on April 5, 2007 charging that Supama, Naresh Kumar Jain, Aaristo Commodities and Futures DMCC, Kanta Nath Jain, and Hainke & Anderson Trading LLC engaged in a pattern of unlawful trading activity involving futures contracts offered by the New York Mercantile Exchange on the Chicago Mercantile Exchange Globex electronic trading platform on several days in March and April 2007.
The complaint alleges that Supama bought commodity futures contracts at low prices from another defendant, and immediately sold them back to that defendant at higher prices resulting in Supama profiting and the other defendant incurring a loss, with no change in open positions held by either defendant. (See CFTC Press Release 5322-07, April 25, 2007.)
The order finds Supama liable for violating the Commodity Exchange Act’s prohibitions against wash sales, accommodation trades, and fictitious sales and engaging in improper noncompetitive commodity futures transactions. Specifically, the order finds that on at least three trading days in March 2007, Supama engaged in a series of copper, gold, crude oil, and natural gas futures transactions whereby Supama repeatedly traded opposite another defendant, resulting in $164,680 in profits to Supama’s accounts and the same amount of losses to the other defendant’s accounts. The order further finds that the illegal transactions involved back-month, illiquid contracts fast-matched at off-the-market prices during an unusual time of day.
The order also requires Supama to pay a $164,680 civil monetary penalty and implement enhanced compliance procedures.
The CFTC thanks the New York Mercantile Exchange and MF Global Inc. for their assistance. The CFTC also thanks the Dubai Financial Services Authority.
The following CFTC Division of Enforcement staff members are responsible for this matter: Sheila Marhamati, Michael Berlowitz, Philip Rix, Manal Sultan, David Acevedo, Lenel Hickson, Stephen Obie, and Vincent McGonagle.
Last Updated: January 22, 2008