Getting involved in the commodities market can be a rewarding experience, but you also have to be wary of scam artists. Commodity scams can range from high-pressure sales tactics to spoofing to market manipulation.
Traders who engage in spoofing commodity scams are committing a criminal offense, according to the Justice Department. Traders who engage in this type of fraudulent activity attempt to manipulate the price of commodities by creating a false impression of demand or supply. These practices can affect the market by misrepresenting the volume of bids and offers in the market.
The Justice Department’s Fraud Section has initiated a major effort to tackle spoofing in the commodity futures market. This initiative has resulted in the filing of numerous criminal and civil complaints against traders who engage in spoofing. The fraud section is responsible for investigating and prosecuting individuals who engage in actions that undermine the integrity of the markets.
Traders who engage in spoofing scams are committing a criminal offense, which is punishable by up to 10 years in prison. This type of fraud is separate from commodities fraud, which is a more serious offense with a maximum prison term of 25 years.
High-pressure sales tactics
Using high-pressure sales tactics to coax you into buying something is nothing new. You may have signed a contract to monitor your digital assets or have agreed to pay for a luxury suite of amenities. A quick Google search will reveal the Federal Trade Commission is in the business of protecting your financial privacy and your hard earned cash. The best defense is to arm yourself with the facts. The more you know the better off you are. Using a reputable broker or broker of choice will save you both headaches and money. If it’s too good to be true, well, it probably is. A no-fee reputable broker will also be able to point you in the right direction. Using a broker for the right reasons will likely be one of the best decisions you make this year. Using a broker to find out who your financial ilk really are will be a no brainer in your long term financial wellbeing.
Using a commodity as the foundation for a fraud is not only illegal but it can be dangerous. The Commodity Futures Trading Commission (CFTC) is an agency responsible for fostering healthy competitive markets. It works with federal and state agencies to ensure that financial markets are safe, secure and sound.
The CFTC has taken a proactive approach to combating fraud in the futures markets. They have taken action against 1,191 unlicensed entities in 2020. Aside from this, they have also rolled out a Commodities Scam Register to help consumers spot a crook.
The most successful schemes involve fraudulent traders, brokers, banks and online exchanges. Aside from the usual suspects, there are also some lesser known players. The CFTC has a website to help consumers avoid the bad guys.
Besides being the official name for the best regulated futures market, the CFTC also fosters open and competitive markets. They do this by regulating hedge funds, foreign currency schemes and commodities fraud.
Penalties for securities and commodities fraud
Buying and selling commodities and securities is critical to the United States economy. The government regulates this industry, and penalties for securities and commodities fraud are harsh.
The penalties for commodities and securities fraud can range from fines to federal prison. The Department of Justice (DOJ) prosecutes these crimes. It is important to consult a qualified lawyer if you have been accused of fraud. They can help you avoid the criminal penalties that accompany a conviction.
Fraud is a serious crime that can lead to decades in prison. It is important to understand that the penalties for commodities and securities fraud depend on the nature of the charges.
Generally, if a trader or financial services company misrepresents the purchase price of commodities or securities, the penalties can be a felony conviction or imprisonment. In some cases, penalties can be as high as 25 years in prison.
Defendants may also face multi-count indictments. In addition, they may be subject to fines of up to $5 million or more.