Clark allegedly engaged in a fraudulent scheme in which he allegedly received kickbacks on brokerage commissions paid by his employer to a voice broker, Classic Energy LLC.
The Commodity Futures Trading Commission filed suit against Matthew Clark of Houston, Texas.
He is the former chairman of an energy company and is accused of misappropriating confidential information about natural gas block orders from his employer and directing natural gas block transactions to a brokerage firm in exchange for a share of the brokerage commissions charged to his employer for these transactions.
The lawsuit, which also accuses Clark of making false statements to the CFTC, was filed in the U.S. District Court for the Southern District of Texas and the regulator is seeking monetary penalties, refunds, restitutions, bans from registration and trading, as well as a permanent injunction against other violations of the Commodities Exchange Act and CFTC regulations.
“Markets thrive on competition, and uncompetitive behavior in the marketplace is wrong, illegal, and will be aggressively pursued by the CFTC. There is no place in the markets for people who participate in or profit from the misuse of confidential information,” Chairman Rostin Behnam said.
“The CFTC will continue to aggressively pursue all individuals who participate in or benefit from the misuse of confidential information and engage in fictitious or non-competitive trading. Additionally, the CFTC will not tolerate and prosecute those who lie to the CFTC or exchanges to conceal their fraudulent activity,” said Acting Chief Enforcement Officer Vincent McGonagle.
The wrongdoing took place between Aug. 6, 2015, and Dec. 28, 2018, according to the CFTC, which says Clark leaked confidential information about his employer’s natural gas block orders to individual trader Peter Miller, who would execute non-competitive fictitious block transactions. with Clark as well as other trades aimed at profiting from information disclosed by Clark.
In exchange, Miller shared with Clark his profits from trading the information, according to the agency. Miller was also charged for his role in the scheme.
The CFTC also says that from 2009 to 2019, Clark engaged in a fraudulent scheme in which he received kickbacks from brokerage commissions paid by his employer to a voice broker, Classic Energy LLC, a company brokerage owned and operated by Matthew Webb. In return for these commission kickbacks, Clark agreed to direct his employer’s trades to Webb’s brokerage.
These bribes were disguised by directing the voice broker to hire fictitious employees and set up various fictitious companies in the name of family members.