Daniel Bowman, a floor broker registered with the Commodity Futures Trading Commission from 1982 through 2014, agreed to pay a fine of US $34,940 and a permanent trading ban on products regulated by the CFTC for violating speculative position limits on six days in 2010 and 2013. According to the CFTC, Mr. Bowman violated speculative position limits in two accounts – one in his own name and one of a company he controlled – in Chicago Mercantile Exchange Live Cattle Futures Contracts from 12 to 96 lots on the six days. The CFTC said Mr. Bowman realized US $34,940 of “ill-gotten gross profits” as a result of his trading in excess of proscribed limits.
My View: Since this matter involved a negotiated settlement, it is not public what special considerations might have led to the agreed settlement terms. But viewing this objectively, it appears a lifetime trading ban seems a very high penalty for just a few isolated days of de minimis speculative position limits violations. In any case, given this matter’s relatively small dimension, it may have been more appropriate for the Commission to refer the matter to the Chicago Mercantile Exchange for its prosecution in the first instance in light of the CFTC’s scarce resources.