By Karl Plume
CHICAGO, Sept 30 (Reuters) - The U.S. Commodity Futures
Trading Commission fined futures brokerage ADM Investor Services
Inc $425,000 for commingling customer funds with funds from its
non-customer accounts, the top U.S. derivatives regulator said
Monday in a release.
As a futures commission merchant, ADM Investor Services,
which is a fully owned subsidiary of U.S. agribusiness giant
Archer Daniels Midland, is required to keep customer
funds segregated from other accounts per Section 4d(a)(2) of the
Commodity Exchange Act.
CFTC found that ADMIS violated the rule when it treated the
accounts of certain ADM-owned affiliates as customer accounts
prior to July 2011.
"The CFTC Order finds that as a result of ADM's ownership
and voting interests in ADMIS and the affiliates, ADMIS was
prohibited from commingling its customers' funds with funds held
in the affiliates' accounts." the regulator said.
ADMIS said it cooperated fully with the investigation and
has updated its procedures to ensure compliance with CFTC rules.
"No ADMIS customer suffered any financial loss as a result
of the account classification that was the subject of the
settlement," said Thomas Kadlec, president of ADM Investor
"The Commission has not alleged or found that ADMIS profited
from the classification of these accounts as customer accounts,
nor have they alleged or found that we intended to profit from
it," he said.
Lax protection of customer funds contributed to the collapse
of futures brokerage MF Global in October 2011, which left
clients short of $1.6 billion, investigators determined.