US CFTC Fines Two Dubai Residents for Wash Trading

The US Commodity Futures Trading Commission (CFTC) has issued a $100,000 civil monetary penalty fine on two Dubai residents. The regulatory body notes that the two were engaged in wash trading and non-competitive financial transactions.

The individuals in question are Kunal Bansal and Vinit Agarwal, affiliated with Aralia Securities and Vintage Bullion DMCC.

Two Dubai residents to pay $100,000 penalty to the CFTC

The two individuals were accused of facilitating 13 wash trades comprised of 189 gold futures contracts. The two executed these trades on behalf of their companies.

The press release from the CFTC noted that Bansal communicated with Agarwal around April 14, 2020, and asked him to place a sale order on behalf of Vintage for 250 gold future contracts. The contracts were traded on COMEX.

The two worked together for the timing of the order. Bansal placed off-setting orders simultaneously to buy the same amount of gold futures at the same price. The CFTC further notes that the two bids failed to match at some point. However, Agarwal lowered his bid shortly after to match Bansal’s order.

Wash trades are illegal transactions in the commodities markets. The traders are conducted by companies that want to display false trades that depict high demand for their products, while the demand is not as depicted in the trades.

CME Group involved in the investigations

The CFTC launched an investigation into Bansal and Agarwal after detecting the suspicious trade. Additionally, the CME Group was also involved in the investigation.

The fine was charged collectively against the two individuals and their respective companies on behalf of which they conducted the trade. The fine has already been settled by the two companies.

The two individuals have also been charged with a cease and desist order. The order bars them from violating any more securities laws. As mentioned earlier, the CME Group was also involved in the investigation.

The group runs one of the largest derivatives exchanges in the US. It has imposed disciplinary action against the two individuals. Additionally, it has imposed a 10-day suspension on the two. The CME Group has also ordered Bansal and Agarwal to pay a fine of $25,000 and $10,000, respectively.

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