Aggregated News From Investment Management Regulators

CFTC Wins $7.49 Million Jury Verdict in Texas Broker Trading Case


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— The Commodity Futures Trading Commission today announced a jury in the Southern District of Texas issued a verdict finding Andrew Gizienski and EOX Holdings, LLC (EOX) liable for secretly taking the other side of their customers’ orders without consent 65 times and disclosing their customers’ confidential order information five times, in violation of CFTC regulations. The jury awarded $7 million in civil monetary penalties for these violations. The jury also found EOX liable for both failing to supervise Gizienski and to create and/or maintain required copies of seven pre-trade communications. The jury awarded $490,000 in civil monetary penalties for these violations.

The verdict was announced August 9 after a 5-day trial in Houston, Texas. The trial was the culmination of an action the CFTC brought against Gizienski and EOX on September 28, 2018, alleging that defendants misused customer information by trading on material, non-public information and disclosing confidential customer information to a favored client. [See CFTC Press Release No. 7811-18]

“The CFTC is committed to maintaining the integrity of the markets and protecting customers,” said Acting Director of Enforcement Gretchen Lowe. “As we said at the outset of this case, the illegal use of inside or confidential information undermines confidence in markets and will not be tolerated.” 

The CFTC presented numerous witnesses and documentary evidence, including instant message chats and trade data, to establish Gizienski repeatedly disclosed customer names and orders, and traded opposite his own customers.

In addition to the jury’s $7.49 million civil monetary penalties award, Senior Judge Sim Lake imposed a 120-day trading and registration ban on Gizienski. Judge Lake also ordered EOX to implement adequate policies and procedures within 60 days, and permanently enjoined both defendants from further violations of the CEA. 

Division of Enforcement staff members responsible for this case are Candy Haan, Doug Snodgrass, Heather Dasso, Ray Lavko, Joseph Konizeski, Scott Williamson, Robert Howell and former staff member Daniel Burstein.

This news item was originally published by the Commodity Futures Trading Commission (CFTC US). For more information, see the Source Link.

Regulator Information

Abbreviation: CFTC
Jurisdiction: USA

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