Cunningham Commodities' Failure to Supervise Put Seniors’ Retirement Savings at Risk
The Commodity Futures Trading Commission settled charges against registered futures commission merchant Cunningham Commodities, LLC.
According to the CFTC, Cunningham Commodities failed to properly supervise accounts brought to the firm by an introducing broker, whose activities it guaranteed from March to December 2019.
According to the CFTC’s Order, Cunningham Commodities agreed to guarantee the introducing broker’s activities even though it knew the broker offered an options trading program to customers without being registered as a commodity trading advisor. Many of the customers were senior citizens, and their retirement account funds were traded, the Order states.
Most customers lost money under the trading program, and, according to the CFTC, Cunningham Commodities knew that.
According to the CFTC, Cunningham Commodities learned that the National Futures Association believed the introducing broker was deceptively soliciting investors to invest in a program that consistently lost money for almost all customers. However, Cunningham Commodities failed to take proper action. The Order also alleges that Cunningham Commodities never listened to recorded calls of the introducing broker’s solicitations, even as customer accounts were dropping in value.
As a result of its failed supervision, Cunningham Commodities was required to pay a $250,000 civil monetary penalty. The Order also finds that Cunningham Commodities is liable for any restitution or disgorgement obligations imposed against the introducing broker in any CFTC enforcement proceeding, up to $640,000. The CFTC’s Order does not reveal the introducing broker’s identity.
Are you an investor who held accounts with Cunningham Commodities? You may have legal claims, especially if you lost money in an options trading program implemented by the unregistered introducing broker. Contact one of our experienced securities attorneys at 800-816-1031 to further discuss your claims.
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