Geneva Company, Executive To Pay $1.9M For Defrauding Client

GENEVA, IL — A Geneva-based company and one of its executives must pay nearly $1.9 million after settling claims they stole from a client. Foremost Trading and Mark Miller, who is a leading trader and principal at the company, recently entered into settlements with the Commodity Futures Trading Commission and the Chicago Mercantile Exchange Group.

Miller, 44, of Batavia, and Foremost Trading agreed to pay $1.2 million in restitution and $650,000 in fines, but they did not admit or deny accusations that Miller made hundreds of fraudulent trades from a client’s account.

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“Customers need to be able to trust the professionals they empower to trade their accounts,” CFTC Director of Enforcement James McDonald said in a news release. “When someone trading on behalf of a customer commits fraud or trades in a fictitious manner, the Commission will act to address the misconduct, including through bans on trading for others.”

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Miller made at least 45 fictitious trades between February 2014 and August 2016, moving money out of a client’s accounts and into accounts Miller owned with family members, according to the commission’s charges. He also made about 500 other fictitious trades in which he used the client’s accounts to get a “much better price” on trades, the commission said.

Miller also misappropriated the client’s money by reporting “phony errors” and directing winning trades into Miller’s family-owned accounts, according to the commission.

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According to the settlement agreement with the Commodity Futures Trading Commission, Miller was hit with a $250,000 fine and Foremost Trading received a $200,000 fine in connection with those trades. Together, they must repay the client more than $723,000 in restitution.

Foremost Trading “failed to diligently supervise Miller’s handling of customer accounts, which allowed the fraud to continue for years,” the commission said.

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Under a separate settlement with the Chicago Mercantile Exchange Group, Miller was ordered to pay a $200,000 fine, and he and Foremost Trading must pay nearly $480,000 in restitution.

The CME Group said Miller recently offered a settlement in which he accepted sanctions for “dishonorable and uncommercial conduct inconsistent with just and equitable principles of trade” but neither he nor Foremost Trading admitted or denied any of the accusations as part of the agreement.

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Miller performed more than 300 “matched” trades, in which he moved equity from a client’s account to Foremost Trading accounts, according to a disciplinary notice filed by the Chicago Mercantile Exchange Group. Those matched trades cost the client about $480,000, the notice says.

The Commodity Futures Trading Commission and the Chicago Mercantile Exchange Group handed Miller a two-year suspension on trading any commodities or on any exchanges regulated by either group.

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Miller was permanently banned from applying for registration, claiming exemption from registration or performing any activity that requires him to register with the CFTC. He is also barred from any trading floor owned or controlled by the CME Group.

Bob Miller, a principal at Foremost Trading, told Patch on Monday that no criminal charges were brought in relation to the trades at the center of the settlements, adding the company did not admit to any wrongdoing as part of those agreements. No other client accounts were used in or affected by the fraudulent trades, Bob Miller said.