Advantage Futures, a Chicago-based futures commission merchant (FCM), the firm’s CEO Joseph Guinan and former chief risk officer William Steele are to jointly pay USD1.5 million to settle CFTC charges over supervision and risk management failures, and making inaccurate statements in CFTC fillings.

The CFTC charges cover failure to diligently supervise the handling of certain commodity interest accounts, for deficient risk management and credit risk practices, and for knowingly making inaccurate statements to the CFTC through the submission of required risk manuals and the Annual Chief Compliance Officer’s Report.
 
The CFTC order also charges Guinan and Steele with failing to supervise Advantage’s risk management programme. The violations of the Commodity Exchange Act (CEA) and Regulations began in or about November 2011 to at least August 2015, according to the order.
 
As well as the USD1.5 million civil monetary penalty, the order also requires Advantage to comply with undertakings to improve the implementation of its policies, procedures, and oversight practices, including the implementation of strengthened procedures related to its risk management programme and risk department to prevent and detect violations of the CEA and regulations.