July 27, 2010
Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of an enforcement action charging New World Holdings, LLC (NWH), based in Chicago, Ill., with destroying business records and failing to diligently supervise employees. NWH is a registered Introducing Broker and Commodity Trading Advisor. NWH’s principal Steven David Erdman, also of Chicago, and its branch manager Grace Elizabeth Reisinger, of Grand Island, Neb., are charged with aiding and abetting NWH’s failure to keep proper business records. Erdman also is charged with failing to diligently supervise employees. Erdman and Reisinger are registered as Associated Persons of NWH.
The CFTC complaint, filed in the U.S. District Court for the Northern District of Illinois, alleges that, from at least March 10, 2006, to April 1, 2009, NWH failed to maintain books and records as required by the Commodity Exchange Act and CFTC regulations.
Specifically, Reisinger and her supervisor Erdman aided and abetted NWH‘s violations by knowingly falsifying and destroying records, the complaint charges. In sworn testimony before the CFTC, Erdman and Reisinger admitted knowing that purported proprietary trading accounts were actually funded by a number of undisclosed third parties in Australia and elsewhere and further admitted that they should have never introduced these accounts [to the futures commission merchant] as proprietary accounts, according to the complaint. Furthermore, Erdman, as Reisinger’s supervisor, failed to diligently supervise her, and NWH failed to diligently supervise its APs and employees, the complaint alleges.
In its continuing litigation, the CFTC seeks disgorgement of ill-gotten gains, civil monetary penalties and a permanent injunction against further violations of federal commodities law.
The CFTC appreciates the assistance of the Australian Securities and Investments Commission in this matter.
The following CFTC Division of Enforcement staff are responsible for this case: Timothy J. Mulreany, Michael Amakor, Elizabeth N. Pendleton, Tracey Wingate, Gregory Scopino, Paul Hayeck and Joan Manley.
Last Updated: July 27, 2010