Not a Lexis Advance subscriber? Try it out for free.

2019 CFTC LEXIS 7

Commodity Futures Trading Commission

June 28, 2019

CFTC Docket No. 19-08

Commodity Futures Trading Commission (CFTC) Decisions

Opinion

I. INTRODUCTION

The Commodity Futures Trading Commission ("Commission") has reason to believe that from in or about February 2015 to February 2019 (the "Relevant Period") the Respondent, Eagle Market Makers, Inc. ("Eagle" or "Respondent"), violated Section 4c(a)(1) and (2) of the Commodity Exchange Act ("Act"), 7 U.S.C. § 6c(a)(1), (2) (2012), and Commission Regulation ("Regulation") 1.38(a), 17 C.F.R. § 1.38(a) (2018). Therefore, the Commission deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted to determine whether Respondent engaged in the violations set forth herein and to determine whether any order should be issued imposing remedial sanctions.

In anticipation of the institution of an administrative proceeding, Respondent has submitted an Offer of Settlement ("Offer"), which the Commission has determined to accept. Without admitting or denying any of the findings or conclusions herein, Respondent consents to the [*2]  entry of this Order Instituting Proceedings Pursuant to Section 6(c) and (d) of the Commodity Exchange Act, Making Findings, and Imposing Remedial Sanctions ("Order"). 1 

II. FINDINGS

The Commission finds the following:

A. SUMMARY

On multiple occasions during the Relevant Period, Respondent engaged in wash sales in violation of Section 4c(a)(1)  [*3]  and (2) of the Act, 7 U.S.C. § 6c(a)(1), (2) (2012). Eagle entered bids and offers of similar quantities in the same futures product for trading accounts that were owned by Eagle which were intended to and did in fact offset each other upon execution. Typically, a subsequent offsetting bid was entered and priced higher than its original resting offer and/or a subsequent offsetting offer was similarly entered and priced lower than its original resting bid. By intentionally entering these offsetting orders in this manner and achieving the goal of having these bids and offers offset each other upon execution, Eagle negated the risk or price competition incidental to an open and competitive marketplace and thus engaged in noncompetitive transactions in violation of Regulation 1.38(a), 17 C.F.R. § 1.38(a) (2018).

B. RESPONDENTS

Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.

2019 CFTC LEXIS 7 *

In the Matter of: Eagle Market Makers, Inc., Respondent.

CORE TERMS

offset, eagle, wash sale, original bid, commodity, lockdown, noncompetitive, bid, successor