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CFTC Orders Trader and His Firm to Pay $150,000 for Wash Sales

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May 7, 2020

Washington, D.C. — The Commodity Futures Trading Commission today issued an order filing and settling charges against respondents Mehran Khorrami, from New York, and his New York firm, Cayley Investment Management, LLC (CIM), for engaging in wash sales and non-competitive transactions. The order requires Khorrami and CIM to pay a civil monetary penalty of $150,000.

According to the order, Khorrami, on behalf of CIM, engaged in multiple wash sales and non-competitive transactions for accounts held by a client of CIM. These transactions involved foreign currency, crude oil, and gold futures contracts. Specifically, on February 8, 2018, Khorrami placed simultaneous buy and sell orders in six different CME futures contracts. Initially, the orders were at different bid and offer prices, but after being unable to fill the orders, Khorrami repeatedly modified the orders until the bid and offer prices matched. This resulted in a series of pre-arranged cross trades in contracts for crude oil, British Pound, Euro FX, Swiss Franc, and Japanese Yen. In total, respondents made six non-competitive prearranged trades.

In addition to imposing the $150,000 civil monetary penalty, the order requires Khorrami and CIM to cease and desist from further violations of the Commodity Exchange Act and CFTC regulations, as charged.

The CFTC’s investigation was conducted in conjunction with a parallel inquiry by CME. Today, CME issued a Notice of Disciplinary Action in which Khorrami agreed to pay a fine of $30,000 and serve a 10-day suspension arising out of the wash sales and non-competitive transactions that are the subject of the order.

The CFTC thanks the CME for its assistance.

The Division of Enforcement staff members responsible for this action are Dmitriy Vilenskiy, Luke Marsh, Jason Gizzarelli, and Paul Hayeck.

 

-CFTC-

Regulator Information

Abbreviation: CFTC
Jurisdiction: USA

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