CFTC in First Non-Prosecution Agreements with Former Citi Traders

The US Commodity Futures Trading Commission (CFTC) has for
the first time entered into non-prosecution agreements with subjects of an
official investigation.

CFTC says it has signed the agreements with three former
Citi traders, Jeremy LaoDaniel Liao, and Shlomo Salant thanks mainly to what it terms
their “timely and substantial cooperation, immediate willingness to accept
responsibility for their misconduct, material assistance provided to the CFTC’s
investigation of Citigroup, and the absence of a history of prior misconduct.”

As part of the
agreement the three men have all admitted to engaging in illegal trading
activity in the US Treasury futures market while working for Citi –
specifically they engaged in spoofing.

Earlier this year
the bank was fined $25 million for supervision failures and
two of its senior traders, Stephen Gola and Jonathan Brims, were fined $350,000
and $200,000
respectively and temprorarily banned from the futures market
for the same offence and it now seems that the two men and the bank were
brought to justice with the help of Lao, Liao and Salant.

“I am pleased to
announce the first non-prosecution agreements entered into by the Commission,
which I expect will be an important part of the division’s cooperation programme
going forward,” says CFTC director of enforcement James McDonald. “Non-prosecution
agreements like these give the division a powerful tool to reward extraordinary
cooperation in the right cases, while providing individuals and organisations strong
incentives to promptly accept responsibility for their wrongdoing and cooperate
with the Division’s investigation. 

“For many types of
complex cases, there is simply no substitute for cooperating witnesses, who can
tell the inside story of the fraud or misconduct at issue,” McDonald continues.
“Used properly, this type of first-hand knowledge can help the Division
identify more culpable wrongdoers, hold them accountable, and further protect
customers and the integrity of the markets. That’s exactly what happened here.
These traders readily admitted their own wrongdoing, identified misconduct of
others, and provided other valuable information, all of which expedited our
investigation and strengthened our cases against the other wrongdoers.”

Twitter @lamboPnL


Colin Lambert

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