U.S. COMMODITY FUTURES TRADING COMMISSION ASSESSES PENALTIES AGAINST IRISH COMPANY TRADE EXCHANGE NETWORK LIMITED FOR OFFERING ILLEGAL COMMODITY OPTION CONTRACTS
Trade Exchange Network Cooperates with Federal Investigation and Agrees to Pay Civil Penalty of $150,000
WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing and simultaneous settlement of charges under the Commodity Exchange Act (CEA) that Trade Exchange Network Limited (TEN), a limited liability company based in Dublin, Ireland, solicited and accepted orders from U.S. residents for commodity option contracts that were not excepted or exempted from the Commission’s ban on options. TEN owns and operates an Internet-based trading platform that facilitates trading through its websites www.Tradesports.com, www.Intrade.com, and www.TradebetX.com.
The CFTC consent order finds that between January 2003 and May 2005, TEN, through its websites, offered the following commodity option contracts, among others, to U.S. residents: Gold Futures Year End; Daily Crude Oil; Light Sweet Crude Oil Futures Year End; Intraday Euro versus U.S. Dollar Rate; and U.S. Dollar versus Yen Cash Rate.
According to the findings in the order, TEN actively solicited U.S. residents to trade such contracts by retaining an individual in the U.S. to market TEN’s products throughout the country, and TEN ultimately developed a U.S. customer base that was roughly 33 to 40% of its total customer base. The order further finds that the commodity option contracts offered on TEN’s websites were not excepted or exempted from the Commission’s regulation banning options trading, and therefore violated the CEA.
TEN’s high level of cooperation during the underlying investigation resulted in a reduction of the civil monetary penalty to $150,000, which TEN agreed to pay. The order also calls for TEN to cease and desist from further violations of the CEA and comply with specific undertakings. In consenting to the entry of the CFTC’s order, TEN neither admitted nor denied the findings made in the order.
The following Division of Enforcement staff members were responsible for this case: Anne M. Termine, William Hoar, Kathleen Banar, Richard Glaser, and Richard Wagner.
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