UNITED STATES OF AMERICA 

Before the 

COMMODITY FUTURES TRADING COMMISSION 

In the Matter of: 

Brian Mitchell, 

Respondent.

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CFTC Docket No. 21-14

ORDER INSTITUTING PROCEEDINGS PURSUANT TO 

SECTION 6(c) AND (d) OF THE COMMODITY EXCHANGE ACT, MAKING 

FINDINGS, AND IMPOSING REMEDIAL SANCTIONS

I. INTRODUCTION

The Commodity Futures Trading Commission (“Commission”) has reason to believe that 

that between January 2018 and January 2019 (“Relevant Period”), Brian Mitchell (“Mitchell” or 

“Respondent”) violated Section 4m(1) of the Commodity Exchange Act (“Act”), 7 U.S.C. 

§ 6m(1) (2018). Therefore, the Commission deems it appropriate and in the public interest that

public administrative proceedings be, and hereby are, instituted to determine whether

Respondent engaged in the violation set forth herein and to determine whether any order should

be issued imposing remedial sanctions.

In anticipation of the institution of an administrative proceeding, Respondent has 

submitted an Offer of Settlement (“Offer”), which the Commission has determined to accept. 

Without admitting or denying any of the findings or conclusions herein, Respondent consents to 

the entry of this Order Instituting Proceedings Pursuant to Section 6(c) and (d) of the Commodity 

Exchange Act, Making Findings, and Imposing Remedial Sanctions (“Order”), and 

acknowledges service of this Order.1

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 Respondent consents to the use of the findings of fact and conclusions of law in this Order in this proceeding and 

in any other proceeding brought by the Commission or to which the Commission is a party or claimant, and agrees 

that they shall be taken as true and correct and be given preclusive effect therein, without further proof. Respondent 

does not consent, however, to the use of this Order, or the findings or conclusions herein, as the sole basis for any 

other proceeding brought by the Commission or to which the Commission is a party or claimant, other than: a 

proceeding in bankruptcy or receivership; or a proceeding to enforce the terms of this Order. Respondent does not 

consent to the use of the Offer or this Order, or the findings or conclusions in this Order, by any other party in any 

other proceeding. 
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II. FINDINGS 

The Commission finds the following: 

A. SUMMARY 

During the Relevant Period, Mitchell failed to register as a commodity trading advisor 

(“CTA”) despite holding himself out as a CTA and furnishing commodity trading advice to more 

than fifteen persons in violation of Section 4m(l) of the Act, 7 U.S.C. § 6m(l) (2018). 

B. RESPONDENT 

Respondent is Michigan resident and was previously registered with the Commission as 

an Associated Person (“AP”). Mitchell also was an associate member and held principal status at 

the National Futures Association (“NFA”). Mitchell is not currently registered with the 

Commission in any capacity. 

C. FACTS 

 During the Relevant Period, Mitchell, using the mails or any means or instrumentality of 

interstate commerce, engaged in the business of directing client commodity trading accounts at a 

registered futures commission merchant. Mitchell held himself out to friends and acquaintances 

as an experienced and licensed commodities trader and helped clients to establish their own 

commodity trading accounts. 

In a recorded telephone call with an introducing broker (“IB”), Mitchell explained that in 

order to avoid registering as a CTA, he used two friends’ names for powers of attorney on 

customer accounts. Although the customer account documents would have these friends’ names 

on them as authorized traders and not Mitchell’s, Mitchell explained he would actually be 

handling all communications, directing the trading, and working with the clients. Mitchell 

explained that he had been using this scheme for some time at a different IB, and he wanted to be 

up-front before bringing over his business to this IB’s firm. At the time of the call, Mitchell was 

subject to a temporary two-year bar from NFA associate membership and a two-year bar from 

holding principal status.2 During the Relevant Period, Mitchell directed the commodity futures 

trading, generally e-mini futures contracts, in over twenty client accounts and was not registered 

as a CTA. 

III. LEGAL DISCUSSION 

The Act’s registration requirements for commodity professionals are the cornerstone of 

the regulatory framework enacted by Congress to protect the public. “Registration is the kingpin 

in . . . [the Commission’s] statutory machinery, giving the Commission the information about 

participants in commodity trading which it so vitally requires to carry out its other statutory 

functions of monitoring and enforcing the Act.” Flaxman v. CFTC, 697 F.2d 782, 787 (7th Cir. 

1983) (quoting CFTC v. British Am. Commodity Options Corp., 560 F.2d 135, 139-40 (2d Cir. 

 

2 In the Matter of Ethan Mitchell, LLC and Brian Mitchell, Case No. 17-BCC-07, (Nat’l Futures Ass’n Nov. 9, 

2017). 
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1977), cert. denied, 438 U.S. 905 (1978)). Failure to register with the Commission is a serious 

offense, and not a mere technical violation of the Act. See British Am. Commodity Options 

Corp., 560 F.2d at 139-40; see also CFTC v. Hall, 49 F. Supp. 3d 444 (M.D.N.C. 2014) (failure 

to register as CTA, together with disclosure violations, supported lifetime trading ban and 

$210,000 civil monetary penalty), aff’d, 632 F. App’x. 111 (4th Cir. 2015). 

Section 1a(12)(A)(i) of the Act, 7 U.S.C. § 1a(12)(i) (2018), defines a CTA as a person 

who for compensation or profit, engages in the business of advising others, either directly or 

through publications, writings or electronic media as to the value of or advisability of trading in, 

inter alia, commodity futures, commodity options, swaps, and retail forex transactions. Section 

4m(1) of the Act, 7 U.S.C. § 6m(1) (2012), requires CTAs, who use the mails or any means or 

instrumentality of interstate commerce in their business as a CTA, to register with the 

Commission unless the CTA, during the course of the preceding twelve months, has not 

furnished commodity trading advice to more than fifteen persons and does not hold himself out 

generally to the public as a CTA, and other exclusions not relevant here. 

During the Relevant Period, Mitchell acted as a CTA because, for compensation or profit, 

he engaged in the business of advising others as to the value of or advisability of trading 

commodity futures contracts. Mitchell was required to register as a CTA under Section 4m(1) of 

the Act because he made use of the mails or means or instrumentality of interstate commerce, 

such as emails and text messages, in connection with his business as a CTA. Mitchell was 

required to register as a CTA because he held himself out generally to the public as a CTA. In 

addition, Mitchell was required to be registered because, during the course of the preceding 

twelve months, he furnished commodity trading advice to more than 15 persons. Mitchell was 

aware he needed to be registered as a CTA and created the scheme described above to avoid 

registration because he was subject to a registration ban. Further, Mitchell’s commodity futures 

trading advice was not solely incidental to his business; it was the sole purpose. Thus, Mitchell 

violated Section 4m(1) of the Act by acting as an unregistered CTA. 

IV. FINDINGS OF VIOLATIONS 

Based on the foregoing, the Commission finds that, during the Relevant Period, 

Respondent violated Section 4m(l) of the Act, 7 U.S.C. § 6m(l) (2018). 

V. OFFER OF SETTLEMENT 

Respondent has submitted the Offer in which he, without admitting or denying the 

findings and conclusions herein: 

A. Acknowledges service of this Order; 

B. Admits the jurisdiction of the Commission with respect to all matters set forth in this 

Order and for any action or proceeding brought or authorized by the Commission based 

on violation of or enforcement of this Order; 

C. Waives: 
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1. The filing and service of a complaint and notice of hearing; 

2. A hearing; 

3. All post-hearing procedures; 

4. Judicial review by any court; 

5. Any and all objections to the participation by any member of the Commission’s 

staff in the Commission’s consideration of the Offer; 

6. Any and all claims that he may possess under the Equal Access to Justice Act, 5 

U.S.C. § 504 (2018), and 28 U.S.C. § 2412 (2018), and/or the rules promulgated 

by the Commission in conformity therewith, Part 148 of the Regulations, 17 C.F.R. 

pt. 148 (2020), relating to, or arising from, this proceeding; and 

7. Any and all claims that he may possess under the Small Business Regulatory 

Enforcement Fairness Act of 1996, Pub. L. No. 104-121, tit. II, §§ 201–253, 110 

Stat. 847, 857–74 (codified as amended at 28 U.S.C. § 2412 and in scattered 

sections of 5 U.S.C. and 15 U.S.C.), relating to, or arising from, this proceeding. 

8. Any claims of Double Jeopardy based on the institution of this proceeding or the 

entry in this proceeding of any order imposing a civil monetary penalty or any 

other relief, including this Order; 

D. Stipulates that the record basis on which this Order is entered shall consist solely of the 

findings contained in this Order to which Respondent has consented in the Offer; and 

E. Consents, solely on the basis of the Offer, to the Commission’s entry of this Order that: 

1. Makes findings by the Commission that Respondent violated Section 4m(l) of the 

Act, 7 U.S.C. § 6m(l)(2018); 

2. Orders Respondent to cease and desist from violating Section 4m(l) of the Act, 7 

U.S.C. § 6m(1)(2018); 

3. Orders that Respondent be prohibited from, directly or indirectly, engaging in 

trading on or subject to the rules of any registered entity (as that term is defined in 

Section 1a(40) of the Act, 7 U.S.C. § 1a(40) (2018)), for a period of three years 

after the date of entry of this Order, and all registered entities shall refuse him 

trading privileges during that period; 

4. Orders Respondent to pay a civil monetary penalty in the amount of one-hundred 

fifty thousand dollars ($150,000), plus any post-judgment interest; and 

5. Orders Respondent and his successors and assigns to comply with the conditions 

and undertakings consented to in the Offer and as set forth in Part VI of this Order. 
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Upon consideration, the Commission has determined to accept the Offer. 

VI. ORDER 

Accordingly, IT IS HEREBY ORDERED THAT: 

A. Respondent shall cease and desist from violating Section 4m(l) of the Act, 7 U.S.C. 

§ 6m(l) (2018). 

B. Respondent shall pay a civil monetary penalty in the amount of one-hundred fifty 

thousand dollars ($150,000) (“CMP Obligation”) within thirty days of the date of the 

entry of this Order. If the CMP Obligation is not paid in full within thirty days of the date 

of entry of this Order, then post-judgment interest shall accrue on the unpaid portion of 

the CMP Obligation beginning on the date of entry of this Order and shall be determined 

by using the Treasury Bill rate prevailing on the date of entry of this Order pursuant to 28 

U.S.C. § 1961 (2018). 

Respondent shall pay the CMP Obligation and any post-judgment interest by electronic 

funds transfer, U.S. postal money order, certified check, bank cashier’s check, or bank 

money order. If payment is to be made other than by electronic funds transfer, then the 

payment shall be made payable to the Commodity Futures Trading Commission and sent 

to the address below: 

MMAC/ESC/AMK326 

Commodity Futures Trading Commission 

Division of Enforcement 

6500 S. MacArthur Blvd. 

HQ Room 181 

Oklahoma City, OK 73169 

(405) 954-6569 office 

(405) 954-1620 fax 

9-AMC-AR-CFTC@faa.gov 

 If payment is to be made by electronic funds transfer, Respondent shall contact Marie 

Thorne or her successor at the above address to receive payment instructions and shall 

fully comply with those instructions. Respondent shall accompany payment of the CMP 

Obligation with a cover letter that identifies the paying Respondent and the name and 

docket number of this proceeding. The paying Respondent shall simultaneously transmit 

copies of the cover letter and the form of payment to the Chief Financial Officer, 

Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW, 

Washington, D.C. 20581. 

C. Respondent is prohibited from, directly or indirectly, engaging in trading on or subject to 

the rules of any registered entity (as that term is defined in Section 1a(40) of the Act, 7 

U.S.C. § 1a(40) (2018)), for a period of three years after the date of entry of this Order, 

and all registered entities shall refuse him trading privileges during that period; 
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D. Respondent and his successors and assigns shall comply with the following conditions 

and undertakings set forth in the Offer: 

1. Public Statements: Respondent agrees that neither he nor any of his successors 

and assigns, agents or employees under his authority or control shall take any 

action or make any public statement denying, directly or indirectly, any findings 

or conclusions in this Order or creating, or tending to create, the impression that 

this Order is without a factual basis; provided, however, that nothing in this 

provision shall affect Respondent’s: (i) testimonial obligations; or (ii) right to 

take legal positions in other proceedings to which the Commission is not a party. 

Respondent and his successors and assigns shall comply with this agreement, and 

shall undertake all steps necessary to ensure that all of his agents and/or 

employees under his authority or control understand and comply with this 

agreement. 

2. Partial Satisfaction: Respondent understands and agrees that any acceptance by 

the Commission of any partial payment of Respondent’s CMP Obligation shall 

not be deemed a waiver of his obligation to make further payments pursuant to 

this Order, or a waiver of the Commission’s right to seek to compel payment of 

any remaining balance. 

3. For a period of three years after the date of entry of this Order, Respondent agrees 

that he shall not, directly or indirectly: 

a. Enter into any transactions involving “commodity interests” (as 

that term is defined in Regulation 1.3, 17 C.F.R. § 1.3 (2020)), for 

his own personal account or for any account in which he has a 

direct or indirect interest; 

b. Have any commodity interests traded on his behalf; 

c. Control or direct the trading for or on behalf of any other person or 

entity, whether by power of attorney or otherwise, in any account 

involving commodity interests; 

d. Solicit, receive or accept any funds from any person for the 

purpose of purchasing or selling any commodity interests; 

e. Apply for registration or claim exemption from registration with 

the Commission in any capacity, and engage in any activity 

requiring such registration or exemption from registration with the 

Commission, except as provided for in Regulation 4.14(a)(9), 17 

C.F.R. § 4.14(a)(9) (2020); and 

f. Act as a principal (as that term is defined in Regulation 3.1(a), 17 

C.F.R. § 3.1(a) (2020)), agent or any other officer or employee of 

any person (as that term is defined in 7 U.S.C. § 1a(38) (2018)), 
registered, exempted from registration or required to be registered 

with the Commission except as provided for in 17 C.F.R. § 

4.14(a)(9) (2020). 

4. Change of Address/Phone: Until such time as Respondent satisfies in full his 

CMP Obligation as set forth in this Order, Respondent shall provide written 

notice to the Commission by certified mail of any change to his telephone number 

and mailing address within ten calendar days of the change. 

5. Until such time as Respondent satisfies in full his CMP Obligation, upon the 

commencement by or against Respondent of insolvency, receivership or 

bankruptcy proceedings or any other proceedings for the settlement of 

Respondent's debts, all notices to creditors required to be furnished to the 

Commission under Title 11 of the United States Code or other applicable law with 

respect to such insolvency, receivership bankruptcy or other proceedings, shall be 

sent to the address below: 

Secretary of the Commission 

Legal Division 

Commodity Futures Trading Commission 

Three Lafayette Centre 

1155 21st Street N.W. 

Washington, DC 20581 

The provisions of this Order shall be effective as of this date. 

By the Commission. 

Christopher J. Kirkpatrick 

Secretary of the Commission 

Commodity Futures Trading Commission 

Dated: September 22, 2021 

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