FROM: COMMODITY FUTURES TRADING COMMISSION
CFTC Orders Zulutrade Inc. to Pay $150,000 Penalty and Disgorge Profits of $80,000 to Settle Charges of Failure to Supervise Activities Relating to Its Business as a CFTC Registrant
Zulutrade is a CFTC-registered Introducing Broker located in Piraeus, Greece
OFAC administers and enforces economic and trade sanctions against targeted foreign countries based on U.S. foreign policy and national security goals. U.S. persons and entities are generally prohibited from doing business with persons and entities from OFAC targeted countries. During the relevant period, Zulutrade had a procedure to screen for potential accountholders from OFAC targeted countries. That procedure provided that Zulutrade could delegate implementation of OFAC screening to third party service providers or agents provided Zulutrade had a written agreement with the service provider outlining the third party’s responsibilities, and that Zulutrade would actively monitor the delegation to assure that the procedures are being conducted in an effective manner.
However, Zulutrade failed to ensure that it had written agreements with all such entities. Consequently, Zulutrade opened approximately 400 accounts for accountholders from OFAC targeted countries (primarily Iran, Sudan, and Syria). All of the accounts opened for accountholders from targeted countries were from service providers with which Zulutrade did not have written agreements.
CFTC Division of Enforcement staff members responsible for this matter are Jennifer Diamond, David Terrell, Joy McCormack, Elizabeth M. Streit, Scott R. Williamson, and Rosemary Hollinger. The Division worked closely with staff from OFAC in this matter and wishes to thank OFAC for its assistance. OFAC has concluded a settlement with Zulutrade arising out of the same pattern of conduct.
*Aluding to the quote "What we have here is a failure to communicate," from the movie "Cool Hand Luke."