Sioux Center, Iowa — A US government agency says that a Sioux Center firm defrauded farmers in Iowa and other states and will not only have to pay millions of dollars in restitution but will also have to pay a fine of over a million dollars.
According to the Commodity Futures Trading Commission or “CFTC,” which is an independent agency of the US government that regulates futures and option markets, they have issued an Order, which filed and simultaneously settled charges against Kooima & Kaemingk Commodities, Inc., Lauren Kaemingk, and Bradley Kooima for what they say was “Kaemingk’s fraud, unauthorized trading, and making false or misleading statements to CME Group Incorporated, for a former employee’s fraud, unauthorized trading, and violation of CME position limits in live cattle futures contracts, and for K&K’s, Kaemingk’s, and Kooima’s supervision failures.”
CME Group is the Chicago Mercantile Exchange and the Chicago Board of Trade, where futures are traded in grain, livestock, and other commodities.
The CFTC Order requires Kooima & Kaemingk, Kaemingk, and Kooima to pay over $11.9 million in restitution to their customers, which the CFTC says are almost entirely comprised of individual farmers and large-scale farming operations. The Order also requires them to pay a civil monetary penalty of $1.25 million and orders that they cease and desist from further violations of the Commodity Exchange Act and CFTC regulations, as charged.
The order says that Kooima & Kaemingk fraudulently solicited customers and opened investment accounts for certain customers beginning around January 2012 and that, between January 2012 and February 2016, Kooima & Kaemingk, through two of its associated persons, a former employee and Kaemingk, defrauded customers by its unauthorized trading, which caused net customer losses of about $11.9 million.
It also says that when the CME opened an investigation into the former employee’s position-limit violation, Kooima & Kaemingk, through Kaemingk, engaged in a cover-up to conceal the scope of the unauthorized trading at Kooima & Kaemingk. The order says Kaemingk encouraged a customer to withhold information from CME during its investigation and that he also made misleading statements to CME during an interview.
In imposing its civil monetary penalty, the CFTC took into account the fine imposed by CME in its related action.
