CFTC Orders Russian Bank President to Pay $250,000 Penalty

CFTC Orders Russian Bank President to Pay $250,000 Penalty

 The U.S. Commodity Futures Trading Commission (CFTC) has entered an order requiring foreign national Artem Obolensky of Moscow, Russia, to pay a $250,000 civil monetary penalty for making false and misleading statements of material fact to CFTC staff in an interview during a CFTC Division of Enforcement investigation. The order enforces the false statements provision of the Commodity Exchange Act (CEA), which was added by the Dodd-Frank Act.

Obolensky is president of a Russian bank and co-owner of a private investment fund located in Cyprus that both trade foreign currency futures and options on the Chicago Mercantile Exchange, according to the order. The CFTC order found that Obolensky knowingly made false and misleading statements to CFTC staff on October 13, 2011, regarding a trade in March 2012 Japanese Yen call options contracts between these entities.

According to the order, Obolensky said: “The two entities pursue different strategies. Pure coincidence that the trades crossed. Very isolated when viewed in the context of all of the trades the bank has placed in markets over the years.”

However, the order found that the two entities traded opposite each other more than 182 times and modified their orders repeatedly to ensure that they would match. The order also found that Obolensky made the trading decisions for the accounts that traded opposite each other so he knew that the trade CFTC staff asked him about was not a “pure coincidence” or “very isolated.”

CFTC Division of Enforcement Acting Director Gretchen Lowe commented, “Witnesses in CFTC investigations must tell the truth. If they do not, the CFTC will not hesitate to take action to enforce the Dodd-Frank’s prohibition against providing false or misleading information and impose sanctions.”

 Contact the author at smeyerow@optonline.net

For more information about LexisNexis products and solutions connect with us through our corporate site.