CFTC also filed and settled charges that Moore Capital Management (MCM) failed to diligently supervise the handling of MCM’s commodity interest business.
The CFTC order also requires MCM, Moore Capital Advisors (MCA) and Moore Advisors (MA), all of whom are CFTC registrants, jointly and severally, to restrict their registrations as commodity pool operators and/or commodity trading advisors for three years.
The order also requires these entities to comply with undertakings, including a two-year restriction on their trading within 15 minutes of and during the closing period of the platinum and palladium futures and options markets.
The CFTC order found that, since at least November 2007 through May 2008, a former MCM portfolio manager attempted to manipulate the settlement prices of platinum and palladium futures contracts traded on the NYMEX by engaging in a practice known as ‘banging the close.’ Specifically, the former portfolio manager’s orders were entered in a manner designed to exert upward pressure on the settlement prices of the platinum and palladium futures contracts.
The CFTC order finds that MCM failed to supervise diligently the former portfolio manager’s trading and failed to have sufficient policies and procedures designed to detect and deter the violations found in the order.
In addition to the civil monetary penalty and the restricted registration and trading restrictions, the CFTC order requires MCM, MCA and MA to (1) implement a policy requiring certain non-equity trade-related communications to be recorded, maintained and reviewed; (2) submit a report to the CFTC on their compliance with the undertakings; and (3) distribute the CFTC order to current and future employees, principals and officers. The order recognizes Moore Capital’s cooperation with the CFTC during the investigation of this matter.
