For Release: April 9, 2008
Dubai-Based Aaristo Commodities and Futures DMCC Ordered to Pay $100,000 Penalty Related to Charges of Engaging in Illegal Trades
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) announced today that it obtained a $100,000 civil monetary penalty in a consent order settling charges against Aaristo Commodities and Futures DMCC (Aaristo), of Dubai, United Arab Emirates. Aaristo had been charged with engaging in trading that resulted in a money pass among Aaristo’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, imposes a permanent injunction against Aaristo and finds Aaristo 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.
The order stems from a CFTC complaint filed on April 5, 2007 (see CFTC Press Release 5322-07, April 25, 2007) charging that Aaristo, Supama International DMCC, Naresh Kumar Jain, Kanta Nath Jain, and Hainke & Anderson Trading LLC, all of Dubai, engaged in a pattern of unlawful trading activity involving futures contracts offered by the New York Mercantile Exchange (NYMEX) on the Globex electronic trading platform on several days in March and April 2007.
Specifically, the order finds that on at least six trading days in March and April 2007, Aaristo engaged in a series of futures transactions in which Aaristo traded illiquid, distant contracts opposite others at off-the-market prices. The effect of this trading was no net change in open positions of Aaristo but a resulting profit to Aaristo and a loss to the counterparties – that is, a money pass among Aaristo’s accounts and the counterparties’ accounts.
The CFTC thanks the NYMEX and MF Global Inc. (formerly Man Financial Inc.) for their assistance. The CFTC also thanks the Emirates Securities and Commodities 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: April 9, 2008