CFTC approves settlement with futures and options broker Ron Eibschutz
The United States Commodity Futures Trading Commission (CFTC) has approved its proposed settlement with energy futures and options broker Ron Eibschutz. This becomes clear from a set of documents filed with the New York Southern District Court on February 18, 2021.
The proposed consent order, seen by FX News Group, outlines the terms of the settlement.
Ron Eibschutz, an individual residing in South Orange, New Jersey, was employed in New York as a broker of energy futures and options. Eibschutz is one of the defendants in a case about disclosures of nonpublic information about customer trades.
Let’s recall that, in May 2013, the Commission charged Eibschutz with aiding and abetting disclosures of material nonpublic information about customer trades in its case against the CME Group’s New York Mercantile Exchange and two former employees, William Byrnes and Christopher Curtin.
The complaint charged CME NYMEX, Byrnes, and Curtin with violating the Commodity Exchange Act (CEA) and CFTC Regulations through the repeated disclosures during a two and one-half year period of material nonpublic customer information to Eibschutz, an outside commodity broker who was not authorized to receive the information, and charged Eibschutz with aiding and abetting the violations.
According to the allegations, a least from in or about February 2008 to September 2010, Byrnes knowingly and willfully disclosed material nonpublic information about CME NYMEX trading and customers, including about trades cleared through CME ClearPort, to Eibschutz on at least 60 occasions.
The Complaint further alleges that between May 2008 and March 2009, Curtin knowingly and willfully disclosed the same type of information to Eibschutz on at least 16 additional occasions.
The nonpublic customer information unlawfully disclosed by Byrnes and Curtin, in conversations often captured on tape, included details of recently executed trades, the identities of the parties to specific trades, the brokers involved in trades, the number of contracts traded, the prices paid, the structure of particular transactions, and the trading strategies of market participants, according to the amended Complaint.
The Complaint alleges that Eibschutz aided and abetted the violations of the CEA and CFTC Regulations, including by, among other things, repeatedly soliciting Byrnes and Curtin for the specific material nonpublic information they disclosed to him and providing them with information they needed to identify and locate information about the specific trades in which Eibschutz was interested.
According to the proposed consent order, Eibschutz is permanently restrained, enjoined and prohibited from directly or indirectly engaging in any conduct in violation of Section 9(e)(1) of the Act, 7 U.S.C. § 13(e)(1), and Regulation 1.59(d), 17 C.F.R. § 1.59, or aiding and abetting such violations.
There is also a fine, which appears to be a slap on the wrist. Eibschutz will have to pay a civil monetary penalty in the amount of $75,000, within thirty days of the date of the entry of the consent order. It has to be approved by the Court.