Sioux Center brokerage ordered to repay $12M from trading violations
SIOUX CENTER, Iowa -- A Sioux Center brokerage firm must repay nearly $12 million to customers who lost money as a result of federal commodity futures trading violations committed by the firm.
Kooima & Kaemingk Commodities Inc. also has been fined $1.25 million by the federal Commodity Futures Trading Commission. The commission’s order was issued Sept. 26 after commissioners accepted a settlement offer from the firm, co-owned by Bradley Kooima, of Rock Valley, Iowa, and Lauren Kaemingk, of Sioux Center.
The commission found that Kaemingk and one of the firm’s employees engaged in unauthorized trading in so-called “investment accounts” from January 2014 to August 2014. The firm did not obtain authorization from some customers for particular trades and didn’t obtain signed powers of attorney from other customers.
The firm’s employee caused approximately $10.3 million in net customer losses, and Kaemingk’s unauthorized trading caused approximately $1.6 million in net losses.
The company has previously reimbursed its customers approximately $3.2 million, leaving an additional $8.7 million yet to be paid as restitution under terms of the 25-page commission ruling.
Financial marketing company CME Group opened an investigation of Kooima & Kaemingk in 2014 after an employee at the firm had performed a number of unauthorized trades that exceeded position limits for a live cattle futures contract.
After CME Group began its investigation, Kaemingk attempted to cover up the scope of the unauthorized trading, at one point asking the affected customer to provide limited and incomplete information to investigators. Kaemingk, the firm’s vice president, later made misleading statements to CME during an interview.
The commission also found that Kooima, the firm’s president, and Kaemingk failed to supervise their employee’s handling of customer accounts. The ruling said that Kooima and Kaemingk knew by April 2014 that the employee was engaged in unauthorized trading but they did not stop it until firing that person in August 2014.
In the offer to settle, Kooima and Kaemingk did not admit or deny the commissions findings.
The order prohibits Kaemingk from directly or indirectly trading for 15 months. Kooima will not be allowed to trade for four months.