By Cezary Podkul
NEW YORK, Sept 27 (Reuters) - The U.S. Commodity Futures
Trading Commission (CFTC) on Friday accused a Texas man of
defrauding a bank of $42.4 million using ethanol futures
John Aaron Brooks of Houston, Texas allegedly masked growing
losses on the contracts from his employer, the commodities arm
of a large commercial bank, by increasingly inflating their
value, the CFTC said in a lawsuit filed Friday. The agency did
not name the bank involved.
The alleged fraud, which took place from 2010 to 2011, began
to unravel in October 2011 when Brooks exceeded internal trade
limits on cattle futures. Brooks's boss directed him to exit all
of his trades, which he did except for ethanol. That exposed the
losses and soon after Brooks was fired, the CFTC said.
Brooks and his lawyer both declined to comment. The CFTC
also declined to comment.
The bank lost about $42.4 million because of Brooks's schme,
the CFTC said. The agency is seeking a monetary penalty from
Brooks as well as trading and CFTC registration bans, among
The case is U.S. Commodity Futures Trading Commission v.
John Aaron Brooks, U.S. District Court, Southern District of New
York, No. 13 CV 6879.
(Reporting by Cezary Podkul; editing by Clive McKeef)