October 8, 2014
CFTC Settles Action against Friedberg Mercantile Group, Inc., a Registered Futures Commission Merchant, for Secured Amount Deficiency, Commingling of Customer Funds and Failure to Timely Report Secured Amount Deficiency
Washington, DC — The U.S. Commodity Futures Trading Commission (CFTC) today announced that it entered an order requiring Friedberg Mercantile Group, Inc. (Friedberg), a registered Futures Commission Merchant (FCM) in Toronto, Canada, to pay a $70,000 civil monetary penalty for a secured amount deficiency of approximately $240,000 on February 5, 2013, commingling of customer funds with its proprietary funds on February 6, 2013, and failure to timely notify the CFTC of the February 5, 2013 secured amount deficiency as required.
Friedberg is a subsidiary of Canadian broker-dealer Friedberg Mercantile Group, Ltd., also in Toronto. The company maintains a futures business to accommodate its securities customers who wish to trade futures and is one of the smallest FCMs as measured by customer assets required in segregation.
The CFTC Order finds that Friedberg’s handling of a customer request to transfer $300,000 of segregated funds to secured funds caused Friedberg to be under its secured amount requirement by approximately $240,000 on February 5, 2013, and its subsequent movement of funds to its secured account in connection with the same customer request resulted in Friedberg improperly commingling customer funds with its proprietary funds on February 6, 2013.
According to the CFTC Order, Friedberg failed to timely notify the CFTC of the February 5, 2013 secured amount deficiency as required.
The CFTC’s Order requires Friedberg to cease and desist from further violations of the CFTC Regulations charged in the Order, and imposes a $70,000 civil monetary penalty.
The CFTC staff members responsible for this matter are Division of Enforcement staff Susan Gradman, Allison Passman, Joseph Patrick, Scott Williamson, Rosemary Hollinger, and Richard Wagner, and Division of Swap Dealer and Intermediary Oversight staff Nicholas Chiacchere, Robert Loeber, Gerald Nudge and Kevin Piccoli.
Last Updated: October 8, 2014