CFTC Charges Texas Resident Matthew Clark with Misappropriating Confidential Information and Participating in a Brokerage Kickback Scheme
Washington, DC (STL.News) The Commodity Futures Trading Commission today announced it had filed a complaint in the U.S. District Court for the Southern District of Texas against Matthew Clark of Houston, Texas. The complaint charges Clark with misappropriating confidential natural gas block trade order information from his employer and directing natural gas block trades to a brokerage firm in exchange for a share of the brokerage commissions charged to his employer for these trades. The complaint also charges Clark with making false statements to the CFTC.
The CFTC seeks monetary penalties, disgorgement, restitution, registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations.
“Markets thrive on competition, and non-competitive behavior in the market is wrong, illegal, and will be aggressively pursued by the CFTC. There is no place in the markets for people who participate in or benefit from the misappropriation of confidential information,” said Chairman Rostin Behnam.
“The CFTC will continue to aggressively pursue all individuals who participate in or benefit from the misappropriation of confidential information and engage in fictitious or non-competitive trading,” said Acting Director of Enforcement Vincent McGonagle. “Further, the CFTC will not tolerate and will pursue those who lie to the CFTC or the exchanges to conceal their fraudulent activity.”
The complaint alleges that from August 6, 2015, to December 28, 2018, Clark disclosed his employer’s confidential natural gas block trade order information—in breach of his duty of trust and confidence to that employer—to Peter Miller, an individual trader. Clark did so knowing that Miller, on the basis of this information, would execute non-competitive, fictitious block trades with Clark as well as other trades designed to profit from the information disclosed by Clark. Clark also disclosed the information anticipating that Miller would share with Clark his profits from trading on this information. Clark received payments from Miller in cash, representing Clark’s share of Miller’s profits. On December 10, 2021, the CFTC filed a complaint against Miller for his role in this scheme, also in the Southern District of Texas. CFTC v. Miller, No. 4:21-cv-04023 (S.D. Tex. 2021).
The complaint further alleges that from 2009 through 2019, Clark engaged in a fraudulent scheme in which he received kickbacks from the brokerage commissions paid by his employer to a voice broker. In exchange, Clark directed additional natural gas block trade business from his employer to this broker. According to the complaint, Clark disguised these kickback payments in numerous ways, including by directing the voice broker to hire sham employees and establish various shell companies in the name of family members. The complaint also charges Clark with lying to the CFTC in February 2019 in order to further conceal the fraudulent scheme.
The Division of Enforcement staff members responsible for this case is Alison Auxter, Clemon Ashley, Lauren Fulks, Daniel Contrastano, Brandon Wozniak, Thomas Simek, Christopher Reed, and Charles Marvine.