CFTC’s Action Against Monex

On May 1, 2018, U.S. District Court Judge James V. Selna entered an order dismissing the Commodity Futures Trading Commission’s claims against Monex Deposit Company, Monex Credit Company, Newport Services Corporation (collectively “Monex”), and its principals, Michael Carabini, and Lewis Carabini. Monex is a metals brokerage firm and the CFTC had filed suit against defendants alleging g four causes of action for (1) off-exchange transactions in violation of CEA § 4(a), 7 U.S.C. § 6(a); (2) fraud in violation of CEA § 4b(a)(2)(A), 7 U.S.C. § 6b(a)(2)(A), (C); (3) fraud in violation of CEA § 6(c)(1) and Regulation 180.1(a)(1)–(3), 7 U.S.C. § 9(1) and 17 C.F.R. § 180(a)(1)–(3); and (4) violation of CEA § 4d for failure to register with respect to financed transactions. The CFTC also filed a motion for preliminary injunction pursuant to Section 6c(a) of the Commodity Exchange Act (“CEA”), which the Court dismissed as moot.

We were retained by counsel for the Defendants and David Ross, an Executive Vice President of Compass Lexecon, submitted a declaration in opposition to the CFTC’s preliminary injunction motion. Sam Hollander, Jonathan Polonsky and Yili Wang assisted Mr. Ross. Monex and its principals are represented by Neil A. Goteiner, Jessica K. Nall and C. Brandon Wisoff of Farella Braun & Martel LLP.