U.S Court Fines and Bans Firm for Illegal Off-Exchange Metals Trades
The order assesses a civil monetary penalty of $100,000 and a restitution award of $447,342, and permanently bans IGCPM and Papastavrou from registering, trading, soliciting, and engaging in other CFTC-regulated activities. According to the court, since at least August 2011 and continuing through at least May 2013, IGCPM solicited retail customers by telephone to engage in leveraged, margined, or financed precious metals (including gold, silver, platinum, and palladium) transactions. During that period, the CFTC reports that IGCPM’s customers paid at least $1 million to IGCPM in connection with precious metals transactions and that IGCPM received commissions and fees totaling at least $447,342 in connection with these precious metals transactions.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, leveraged, margined, or financed transactions such as those conducted by IGCPM, are illegal off-exchange transactions unless they result in actual delivery of metal within 28 days. The court determined that metals were never actually delivered in connection with the leveraged, margined, or financed precious metals transactions made on behalf of IGCPM’s customers.