CFTC Fines Dubai and Hong Kong Trading Firms for Wash Trades

The Commodity Futures Trading Commission (CFTC) today announced that it has issued an order filing and simultaneously settled charges against Dubai residents Kunal Bansal and Vinit Agarwal and their Hong Kong and Dubai based firms Aralia Securities, Ltd. (Aralia) and Vintage Bullion DMCC (Vintage), respectively, for engaging in wash sales and non-competitive transactions. 

According to the order, Bansal, Agarwal, Aralia, and Vintage are required to jointly and severally pay a $100,000 civil monetary penalty, as well as to cease and desist from further violations of the Commodity Exchange Act and CFTC regulations, as charged.

The order further explained that 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. 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. 

In conjunction with the CFTC's investigation, the CME Group conducted a parallel inquiry into this event and issued a Notice of Disciplinary Action on December 16 their illegal conduct of wash sales and non-competitive transactions, in which Bansal agreed to pay a fine of $25,000 and serve a 10-day suspension, and Agarwal agreed to pay a fine of $10,000 with a 10-day suspension.

​Previously, the CFTC issued an order filing and settling charges against respondent SummerHaven Investment Management LLC, a Connecticut commodity trading advisor and commodity pool operator, for engaging in wash sales and non-competitive transactions on the InterContinental Exchange and various Chicago Mercantile Exchange exchanges, and for failing to diligently supervise its activities in May this year. In contrast, SummerHaven was imposed a civil monetary penalty of $500,000, a larger number than this case since the company made more than 100 non-competitive prearranged trades with an aggregate value of more than $570 million, with a larger sum of money involved.