A little less than a year after filing formal charges, the U.S. Commodity Futures Trading Commission (CFTC) said Wednesday that a U.S. District Court judge in New York has imposed monetary sanctions of more than $3.6 million, a permanent injunction and other relief against Matthew Doyle of Wantagh, NY for using losing natural gas futures transactions to defraud his employer, Natural Futures LLC (NFL) — a New York Mercantile Exchange (Nymex)-registered floor broker.

Ruling in the U.S. District Court for the Southern District of New York, Judge John E. Sprizzo’s order requires Doyle to make restitution to his employer in the amount of $3,507,118.63 and to pay a civil monetary penalty in the amount of $130,000. Doyle was further permanently prohibited from trading in any commodity and from applying for registration with the CFTC. The order stems from a CFTC complaint filed against Doyle in August 2006 for engaging in a scheme to defraud certain customers and his employer (see Daily GPI, Aug. 25, 2006).

Specifically, the court order found that during the week of April 18, 2005, Doyle fraudulently attempted to assign losing trades of natural gas futures contracts to customers’ accounts, but when that failed, he assigned the losing trades to his employer’s account, resulting in his employer suffering millions of dollars in losses. The CFTC said Doyle prepared or caused to be prepared order tickets for hundreds of natural gas futures contracts containing false customer account identification. None of NFL’s customers placed any of the orders. Nevertheless, the order tickets were executed by broker John Proctor, co-owner of NFL, on the Nymex trading floor.

After failing to assign losing trades to NFL’s customers, Doyle then assigned them to Proctor’s own account. If any of the trades were profitable, Doyle did not intend to assign them to customer accounts, the CFTC said.

“Since these losing trades were placed into Proctor’s account, Proctor suffered millions of dollars in losses as a result of this scheme,” the CFTC said.

The CFTC noted that the Nymex compliance staff assisted with the investigation.

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