Dubai / Hong Kong trading firms hit with fines for Wash Trades
The U.S. Commodity Futures Trading Commission (CFTC) has announced that it has issued an order filing and simultaneously settling charges against Dubai residents Kunal Bansal and Vinit Agarwal and their Hong Kong and Dubai based firms Aralia Securities Ltd. and Vintage Bullion DMCC, respectively, for engaging in wash sales and non-competitive transactions.
The order requires Bansal, Agarwal, Aralia, and Vintage jointly and severally to pay a $100,000 civil monetary penalty.
In addition to imposing the $100,000 civil monetary penalty, the order requires all of the respondents to cease and desist from further violations of the Commodity Exchange Act and CFTC regulations, as charged.
According to the order, Bansal, on behalf of Aralia, and Agarwal, on behalf of Vintage, engaged in multiple wash sales and non-competitive transactions for accounts held by Aralia and Vintage. Specifically, on or about April 14, 2020, Bansal directed Agarwal to enter orders for Vintage to sell 250 gold futures contracts traded on COMEX at a specific time. At the same time Agarwal entered those orders, Bansal entered off-setting orders to purchase gold futures in the same quantities and at the same prices. In one instance, Agarwal’s offer differed from Bansal’s bid, and therefore the trades failed to match. To ensure the trades would match, Agarwal lowered his offer to match Bansal’s bid. As a result of Bansal and Agarwal’s conduct, Aralia and Vintage entered into a total of 13 wash trades consisting of 189 gold futures contracts.
The CFTC’s investigation was conducted in conjunction with a parallel inquiry by the CME Group. Arising out of the wash sales and non-competitive transactions that are the subject of the order, on December 16 the CME Group issued a Notice of Disciplinary Action in which Bansal agreed to pay a fine of $25,000 and serve a 10-day suspension, and Agarwal agreed to pay of fine of $10,000 with a 10-day suspension.
The CFTC added that it thanks the CME Group for its assistance.