by Howard Haykin

Most Financialish.com readers who operate in and around financial services focus predominantly on the equities and options markets because that’s where most clients and customers invest their money. And so, they follow with peaked attention to FINRA and the SEC pronouncements on new rules, guidelines, priorities and disciplinary actions – which obviously focus largely on the equities and options markets. To a lesser extent, our readers follow the futures markets and related pronouncements from the CFTC.

Now, for a moment, let’s visualize the financial markets as a casino. The equities and options markets are represented by blackjack tables, slot machines and other games against the house, where you’ll find most of the actions. It’s also where, for the most part, gains and losses pile up methodically.

Conversely, the futures markets – forex, precious metals, and commodities – are represented by the craps and poker tables, and other games that pit player against player. Here you’re more likely to find highly leveraged bets, fast-paced action and the potential for quick and significant gains or losses.

That same ‘casino’ logic holds true when it comes to investor losses arising from fraud. Investor losses in cases involving equities tend to be relatively small and measured, whereas investor losses related to futures tend to be significantly larger.

Here are the outcomes of cases reported by the CFTC since May 1:

• CFTC Charges Pennsylvania Resident with Fraudulently Soliciting Commodity Futures Customers and Distributing False Account Statements  (5/2/17 - $852,000 in losses).

• CFTC Charges Arizona Resident and His Company, Williams Advisory Group, with Fraudulently Soliciting and Receiving at Least $13 Million in Commodity Pool Scheme  (5/3/17 - $13 million)

• Federal Court Orders Utah Resident and MakeYourFuture to Pay Customer Restitution and Civil Monetary Penalties for Fraud in Connection with Offering and Selling a Futures Trading System  (5/22 - $853,000/$1.2 million including penalties)

• Federal Court Orders More than $1 Million in Restitution and Civil Monetary Penalties and Permanently Bans Florida Resident and His Company, Guardian Asset Group, for Engaging in Illegal, Off-Exchange Precious Metals Transactions  (5/23 - $434,000 / $1.1 million)

• Federal Court Orders K.B. Concepts Group and Florida Resident to Pay More than $486,300 in Disgorgement and a Civil Monetary Penalty for Engaging in Illegal, Off-Exchange Precious Metals Transactions  (5/30 - $122,000 / $486,000)

• CFTC Charges Estonian Company Tallinex with Fraud and Failure to Register as a Retail Foreign Exchange Dealer and Nevada Company General Trader Fulfillment with Failure to Register as an Introducing Broker  (6/5 - $1.5 million)

For further information:

Click here for CFTC Advisory - Forex Fraud.

Click here for CFTC Advisory - Precious Metals Fraud.