Commodity Trading Charge Defense Lawyers
Trading commodities can be a great way for anyone to earn a strong return on investment. Similar to trading other public securities, there are a variety of laws in place that govern how you may trade commodities. Those that are suspected of trading commodities with insider information or trading in a fraudulent manner could face federal charges.
Who Handles Commodities Trading Charges?
Today, commodities charges are handled by the CFTC. This is a federal enforcement division that handles many trading and investment charges, such as fraud and insider trading. The organization works to handle charges for federal, state and foreign trading violations. This can include handling charges related to illegal trades related to commodities, swaps, options, and futures.
What are Common Commodities Trading Violations?
There are a variety of different types of commodities trading crimes that you could be charged with. One of the most common is in regards to insider trading. While insider trading is not as rampant with commodities trading as it is with stocks, there are situations in which you could have insider data that could give you an unfair advantage on the market. If you do trade with insider information, you could be charged with a criminal act. The CFTC also commonly investigates fraudulent trading activity. This more has to do with institutional traders that may make trades that go against their reported investment strategy or if they do not provide investors with the right amount of financial detail or inaccurate data.
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(212) 300-5196What are Commodities Trading Penalties?
If you are charged with a criminal commodities trading charge, there are a variety of different penalties that you could be hit with. The most common penalties are typically financial penalties that can be levied in either civil or criminal trials. These penalties will surely require you to pay back any profits you made when using insider information and could also include fairly significant punitive penalties.
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Featured on Netflix's "Inventing Anna," Todd Spodek brings decades of high-stakes criminal defense experience. His aggressive approach has secured dismissals and acquittals in cases others deemed unwinnable.
You received a call from a CFTC investigator who says they are looking into several trades you made in natural gas futures right before a major pipeline company announced unexpected maintenance shutdowns. Your broker has also been contacted and you're worried that your trades, which were based on a tip from a friend who works at the pipeline company, could be considered illegal.
Can I really face federal charges for trading commodities based on information someone shared with me in a private conversation?
Yes, trading on material nonpublic information in the commodities markets can result in serious federal charges under the Commodity Exchange Act (CEA), which prohibits fraud and manipulation in futures and derivatives trading. The CFTC has increasingly pursued insider trading cases under CEA Section 6(c)(1) and Rule 180.1, which mirror the SEC's anti-fraud provisions and make it unlawful to trade on misappropriated confidential information. Penalties can include fines up to three times the monetary gain from the illegal trades, and criminal prosecution by the DOJ can carry prison sentences of up to 25 years per count of commodities fraud under 18 U.S.C. § 1348. You should not speak with investigators or your broker about these trades until you have legal counsel, as anything you say now could be used to establish that you knew the information was nonpublic when you acted on it.
This is general information only. Contact us for advice specific to your situation.
If you have been trading with insider information over a period of time, or if you are guilty of fraud, you could be facing imprisonment. These financial crimes can carry a variety of prison term lengths, some of which can extend for several decades depending on the scope of the crime. Those that are charged with insider information or other trading violations may permanently be restricted from trading commodities and stocks in the future. Others may simply be put on a probation plan.
