The CFTC filed an enforcement action charging a trader with defrauding a large FCM (his employer) by intentionally concealing from the FCM the true size, risk, and potential profits and losses associated with the SP 500 e-mini futures contracts position in an account controlled by the trader. As a result of the trader's concealment, the complaint charges that the firm lost almost $120 million. Lofchie Comment: Firms being brought down by rogue traders is a recurrent drama. I would guess that there are more episodes of this than there are of failures through algos gone bad. Click hereto view

The Chicago Mercantile Exchange sued the CFTC as to its rule making (at 77 Fed. Reg. 2136 - Jan. 13, 2012, codified at 17 C.F.R. Part 45) insofar as the CFTC rule would require CFTC-registered derivatives clearing organizations ("DCOs") to provide nonpublic regulatory reports of cleared swap transactions to Swap Data Repositories ("SDRs"). Among the bases for the complaints are that (i) the CFTC is not authorized by the statute to issue the rule; (ii) the CFTC has not performed any cost-benefit analysis of the rule; (iii) the CFTC has issued an interpretation of its rule that is inconsistent

SIFMA, ICI, U.S. Chamber of Commerce and the Financial Services Roundtable submitted a letter to U.S. Department of the Treasury Timothy F. Geithner regarding their opposition to a national, global or regional financial transactions tax ("FTT"), asserting that such a levy would contribute to economic uncertainty and distort the ability of investors and businesses to make long-term economic decisions. The organizations argue that an FTT will impede growth, fragment markets, increase market volatility, destroy savings, and encourage uneconomic tax-motivated decision making. View letter in full

FINRA has expelled NY-based Hudson Valley Capital Management and barred Chief Executive Officer, Mark Gillis, from the securities industry for defrauding the broker-dealer's clearing firm and customers by using their funds and securities to cover losses caused by Gillis's manipulative day trading. Hudson Valley failed to supervise Gillis's trading activities at the firm; thus, Gillis was able to conduct his fraudulent trading scheme without restriction. Gillis's scheme caused a net capital deficiency for Hudson Valley in excess of $350,000. View disciplinary action in full here (links

Further to the entry into force of the regulation on short selling and certain aspects of credit default swaps on November 1, the Financial Services Authority has continued to update its website with information for market participants, most recently with new web pages on: its powers to prohibit short selling and measures available to it for this purpose; and current prohibitions on short selling in the European Union. Lofchie Comment: As we have previously noted, the FSA takes a broad view of its jurisdiction; i.e., it takes the view that it has jurisdiction over U.S. investors trading