Enforcement

CFTC Secures Over $288 Million in Orders Against Commodity Pool Ponzi Operator

Summary: A New York federal court granted the CFTC summary judgment against EminiFX Inc., which held itself out as a crypto and forex investment club, and its founder, ordering $228.6 million in restitution, $15 million in disgorgement (offset by any restitution paid) and a $45.1 million penalty. According to the court, investors contributed more than $262 million after being shown weekly returns of 5% to 9.99%, while the firm recorded net losses above $49 million.

Why It Matters: The orders, announced more than four years after the CFTC’s May 2022 complaint, show the agency pursuing retail commodity pool fraud through summary judgment, with restitution, disgorgement and a penalty exceeding $45 million.

Potential Action: CPOs, CTAs and other managers soliciting retail investors for crypto or forex strategies should verify that reported returns are supported by actual trading records, reconcile investor balances to independent custodial statements, and escalate promptly when stated performance cannot be substantiated.

Read More Here (CFTC)

What Regulators Are Saying

SEC Investment Management Director Outlines “Responsible Retailization” Agenda and Invites Input on AI Barriers

Summary: In an October 16 speech at Stanford, Division of Investment Management Director Brian Daly framed the SEC’s “responsible retailization” initiative around access, transparency and incentives, pointing to recent staff relief and to pending proposals on adviser performance fees and interval funds. He also urged advisers to adopt AI tools, which the SEC now terms “Super Intelligence,” under existing fiduciary duties, and invited firms to identify rules or staff positions that block deployment.

Why It Matters: Although delivered in his official capacity and not reflecting the Commission’s views, the speech signals that staff expect fund-structure and fee changes to open retail channels to private-markets managers, and expect advisers to proceed with AI rather than await guidance.

Potential Action: Managers weighing registered-fund or interval-fund vehicles should track the performance-fee and interval-fund proposals. Advisers using or piloting AI should document governance and supervision under existing fiduciary and compliance-rule obligations, and flag any rule-based obstacles to the Division.

Read More Here (SEC)

SEC Trading and Markets Director Previews Rule 611 Review and Arrival of Perpetual Securities Futures

Summary: Speaking to the Security Traders Association on October 14, Division of Trading and Markets Director Jamie Selway said staff are reviewing more than 1,200 comment letters on the proposed rescission of Rule 611, the trade-through rule, and are reviewing Rules 610 and 612, covering access-fee caps and minimum pricing increments, by year-end. He said he expects at least four CFTC-registered exchanges to begin trading perpetual futures on securities this quarter.

Why It Matters: The remarks show Regulation NMS changes advancing alongside best-execution reform and signal that new products, including perpetual securities futures, are close to market, with implications for broker-dealer order routing, execution policies and supervision.

Potential Action: Broker-dealers and advisers should monitor the Rule 611 rulemaking, assess how a rescission would affect best-execution and order-routing policies, and evaluate controls before offering or trading new products such as perpetual securities futures.

Read More Here (SEC)

In the News

Bank of England Reportedly Examining Barclays’ Treatment of Private Credit Total Return Swaps

Summary: The Bank of England is examining whether Barclays traders misrepresented illiquid private credit loans to understate their risk, the Financial Times reported on October 19, after an insider complaint to the Prudential Regulation Authority. The complaint reportedly concerns the booking of total return swaps referencing illiquid loans in the trading book, allegedly in breach of PRA rules. Barclays said its treatment was consistent with accounting and regulatory capital requirements; the Bank of England declined to comment.

Why It Matters: Although a UK matter resting on unnamed sources and disputed by Barclays, it highlights supervisory attention to how financing structures tied to private credit are classified and capitalized, which bears on funds that borrow through bank total return swaps.

Potential Action: Private credit managers using total return swaps or other bank financing should confirm that valuation and liquidity information given to counterparties matches fund records, and be prepared for questions on collateral classification and supporting evidence.

Read More Here (Financial Times)

Events

SEC to Host November 9 Roundtable on Machine-Understandable Data and AI

Summary: The SEC will hold a public roundtable on November 9, 2026, from 9 a.m. to 3:30 p.m. EST at its Washington headquarters on the use of machine-understandable data and “Super Intelligence,” the SEC’s term for AI, including related risks and costs. The Division of Economic and Risk Analysis said market feedback will inform how the Commission can better facilitate AI. The event will be streamed live on SEC.gov.

Why It Matters: The event indicates the SEC is gathering input on how data quality and structure affect AI use by investors and market participants, which could inform future disclosure and data initiatives.

Potential Action: Advisers and funds that produce or rely on structured data for AI tools should attend or monitor the webcast, and review how their data inputs, vendor tools and supervision processes would withstand regulatory scrutiny.

Read More Here (SEC)