UNITED STATES OF AMERICA
COMMODITY FUTURES TRADING COMMISSION
|In the Matter of:||)||CFTC Docket No. 00-08|
|Steven C. Brenner||)||COMPLAINT AND NOTICE|
|1655 Lake Cook Road, Apt. 144||)||OF HEARING PURSUANT TO|
|Highland Park, IL 60035||)||SECTIONS 6(c) AND 6(d) OF THE|
|)||COMMODITY EXCHANGE ACT,|
|Jami Weisner Brenner||)|
|1655 Lake Cook Road, Apt. 144||)|
|Highland Park, IL 60035,||)|
The Commodity Futures Trading Commission ("Commission") has received information from its staff which tends to show, and the Commission's Division of Enforcement ("Division") alleges that:
1. From in or about January 1995, and continuing to at least October 1999, Steven C. Brenner ("Brenner") has engaged in acts and practices which constitute violations of a Commission order and Section 8b of the Commodity Exchange Act, as amended ("Act"), 7 U.S.C. § 12b (1994), by trading commodity futures in violation of a ten-year trading prohibition imposed by the Commission on August 27, 1990. Brenner was aided and abetted by his wife, Jami Weisner Brenner ("Weisner"), in his repeated violations of the order.
2. Specifically, Brenner traded on Commission-regulated exchanges ("Exchanges") through accounts at various futures commission merchants ("FCMs") under the names of Ronald Boylan and Jami Weisner from January 1995 to October 1999. With knowledge of Brenner's trading prohibition and his violation of the Commission order, Weisner assisted Brenner in trading on Exchanges through accounts in her name and the name of Boylan.
3. Respondent Steven C. Brenner resides at 1655 Lake Cook Road, Apt. 144, Highland Park, IL 60035. He is currently subject to a ten-year trading ban imposed by the Commission on August 27, 1990 (In re Steven C. Brenner, CFTC Docket No. 90-7 (August 27, 1990)), and an Order of Permanent Injunction of the United States District Court for the Northern District of Illinois prohibiting him from violating the trading ban (CFTC v. Brenner, Case No. 92C4350 (N.D. Ill. July 7, 1992)). Brenner was registered as an associated person of various firms from 1980 to 1984.
4. Respondent Jami Weisner Brenner resides at 1655 Lake Cook Road, Apt. 144, Highland Park, IL 60035. She has never been registered with the Commission in any capacity.
A. Brenner's Trading Prohibition
5. Due to Brenner's failure to pay a reparations award ordered on December 19, 1986, Brenner was automatically prohibited from trading pursuant to Section 14(f) of the Act and Regulation 12.407(c). In March 1990, the Division filed an administrative complaint against Brenner for violating the automatic trading prohibition of Section 14(f) of the Act and Regulation 12.407(c). Brenner failed to answer the complaint and a default was entered, pursuant to which, on August 16, 1990, the Administrative Law Judge (1) ordered Brenner to cease and desist from violating Section 14(f) of the Act and Regulation 12.407(c); (2) prohibited Brenner from trading on any Exchange for ten years; and (3) ordered Brenner to pay a civil monetary penalty of $10,000.00. The order of the ALJ ("Order") became final on August 27, 1990.In re Steven C. Brenner, CFTC Docket No. 90-7 (August 27, 1990)(Painter, J.).
6. Brenner violated the Order by trading on Exchanges during 1992, and the Division brought suit in the United States District Court for the Northern District of Illinois seeking to enjoin Brenner from further violations of the Order. On July 7, 1992, the Court entered an Order of Permanent Injunction ("Injunction") by consent of the parties which prohibited Brenner from trading in violation of the Order.
7. In 1993, Brenner again began trading futures contracts on Exchanges. For that violation of the Injunction, the U.S. Department of Justice prosecuted Brenner criminally and he pled guilty to disobeying a lawful order of the Court under 18 U.S.C. § 401. In the plea agreement, entered on December 16, 1996, Brenner pled guilty to trading in violation of the Injunction during the period from July 2, 1993 to December 28, 1994. In April 1997, Brenner was sentenced to weekend detention for one month, and two years of probation. United States of America v. Brenner, Case No. 96CR763 (N.D.Ill.).
B. Brenner's Continued Trading in Violation of the Commission Order
8. Beginning in or about January 1995, Brenner resumed trading on Exchanges, in violation of the Order.
9. From January 1995 to May 1995, Brenner traded through an account he opened in the name of Ronald Boylan ("Boylan"), a friend, at Peregrine Financial Group, Inc. ("Peregrine"), an FCM in Chicago, Illinois ("Boylan Account"). Through the Boylan Account, Brenner traded a variety of futures contracts, including the Standard and Poor's 500 Index ("S&P's").
10. On or about May 11, 1995, Peregrine stopped the trading in the Boylan Account due to a debit balance in excess of $38,000. Brenner (under the name Boylan) negotiated an arrangement with Peregrine to work for free as an order clerk in order to compensate Peregrine for the losses in the Boylan Account.
11. Eight days after Peregrine closed the Boylan Account, Weisner opened an account at Peregrine ("Weisner Account"), which began trading on or about May 19, 1995. Continuing to pose as Boylan, Brenner worked as the night order clerk for Peregrine for approximately one year, and traded the Weisner Account in a variety of futures contracts, including S&P's. Indeed, during this period, the Weisner Account traded mainly at night.
12. The Weisner Account made in excess of $38,000 in 1995 and in excess of $22,000 in 1996. The Weisner Account was closed in October 1996.
13. On or about May 25, 1995, fourteen days after Peregrine closed the Boylan Account, Weisner opened an account at LFG, LLC ("LFG Account"). Brenner traded the LFG Account with Weisner's knowledge, consent and assistance.
14. The LFG Account traded in a variety of futures contracts, including S&P's, from May 1995 to March 1997. In March 1997, LFG discontinued the trading in the LFG Account due to excessive losses.
15. In April 1997, Weisner opened two accounts at Spike Trading ("Spike Accounts") and began trading.
16. Brenner posed as Weisner and used the Spike Accounts to trade on Exchanges. From April 1997 to October 1997, the Spike Accounts traded a variety of futures, including S&P's.
17. In December 1997, Brenner, identifying himself as "Jami Weisner," opened a trading account at ED & F Man, an FCM in Chicago, Illinois ("Man Account").
18. Approximately one month after Brenner opened the Man Account, Weisner called the account representative at Man in order to trade the Account. Weisner stated that her husband had used her name to open the Account. Weisner then granted oral permission for her husband, Brenner, to call in trades and communicate with the account executive and order clerks regarding the Man Account.
19. With Weisner's knowledge, consent and assistance, Brenner ordered trades in the Man Account and communicated with the account executive. The Man Account traded a variety of futures contracts on Exchanges, including S&P's, until October 1999.
20. In November 1997, Weisner opened an account at Finacor Vendome, Inc. ("FVI"), an FCM in Chicago, to trade on foreign exchanges ("FVI Account"). She signed a power of attorney to "Ron Boylan" and the account traded on foreign exchanges under the direction and control of a person known as "Ron Boylan." In fact, Brenner was posing again as Boylan with the knowledge, assistance and aid of Weisner.
VIOLATIONS OF THE COMMODITY EXCHANGE ACT
SECTION 8b OF THE ACT:
VIOLATION OF A TRADING PROHIBITION
21. The allegations contained in paragraphs 1 through 20 above are realleged and incorporated by reference.
22. From January 1995 through October 1999, Respondent Brenner violated Section 8b of the Act, 7 U.S.C. § 12b, by making or causing to be made contracts for future delivery of commodities, on or subject to the rules of contract markets, in contravention of an order of the Commission.
23. From January 1995 through October 1999, Respondent Weisner willfully aided, abetted, counseled, commanded, induced, procured, caused, or acted in combination or concert with Brenner in the foregoing violations of Section 8b of the Act. Weisner is therefore responsible for Brenner's violations of Section 8b of the Act pursuant to Section 13(a) of the Act.
VIOLATION OF AN ORDER OF THE COMMISSION
24. The allegations contained in paragraphs 1 through 20 above are realleged and incorporated by reference.
25. From January 1995 through October 1999, Respondent Brenner violated the Order of the Commission, by making or causing to be made contracts for future delivery of commodities, on or subject to the rules of contract markets.
26. From January 1995 through October 1999, Respondent Weisner willfully aided, abetted, counseled, commanded, induced, procured, caused, or acted in combination or concert with Brenner in the foregoing violations of the Order. Weisner is thereby responsible for Brenner's violations of the Order pursuant to Section 13(a) of the Act.
By reason of the foregoing allegations, the Commission deems it necessary and appropriate, pursuant to its responsibilities under the Act, to institute public adminis-trative proceedings to determine whether the allegations set forth in Section III above are true and, if so, whether an appropriate order should be entered in accordance with Sections 6(c) and 6(d) of the Act, 7 U.S.C. §§ 9 and 13b(1994).
Section 6(c) allows the Commission to enter an order (1) prohibiting a Respondent from trading on or subject to the rules of any contract market and requiring all contract markets to refuse such person all trading privileges thereon for such period as may be specified in the Commission's Order, (2) if a Respondent is registered with the Commission in any capacity, suspending, for a period not to exceed six months, or revoking the registration of that Respondent, (3) assessing against a Respondent a civil penalty of not more than the higher of $110,000 or triple the monetary gain to the Respondent for each violation of the Act or Regulations committed on or after November 27, 1996, and a civil penalty of not more than the higher of $100,000 or triple the monetary gain to a Respondent for each violation of the Act or Regulations committed prior to November 27, 1996, and (4) requiring a Respondent to pay restitution to customers of damages proximately caused by the violations of the Respondent.
Section 6(d) allows the Commission to enter an Order directing that the Respondent cease and desist from violating the provisions of the Act and Regulations found to have been violated.
WHEREFORE, IT IS HEREBY ORDERED that a public hearing for the purpose of taking evidence and hearing arguments on the allegations set forth in Section III above be held before an Administrative Law Judge, in accordance with the Rules of Practice under the Act, 17 C.F.R. § 10.1 et seq. (1999), at a time and place to be fixed as provided in Section 10.61 of the Rules of Practice, 17 C.F.R. § 10.61 (1999), and that all post-hearing procedures shall be conducted pursuant to Sections 10.81 through 10.1-07 of the Rules of Practice, 17 C.F.R. §§ 10.81 through 10.107 (1999).
IT IS FURTHER ORDERED that each Respondent shall file an Answer to the allega-tions against said Respondent in the Complaint within twenty (20) days after service, pursu-ant to Section 10.23 of the Rules of Practice, 17 C.F.R. § 10.23 (1999), and pursuant to Section 10.12(a) of the Rules of Practice, 17 C.F.R. § 10.12(a) (1999), shall serve two copies of such Answer and of any document filed in this proceeding upon Paul G. Hayeck, Trial Attorney, Commodity Futures Trading Commission, Division of Enforcement, Three Lafayette Centre, 1155 21st Street, NW, Washington, DC 20581, or upon such other counsel as designated by the Division. If any Respondent fails to file the required Answer or fails to appear at a hearing after being duly served, such Respondent shall be deemed in default, and the proceeding may be determined against such Respondent upon consideration of the Complaint, the allegations of which shall be deemed to be true.
IT IS FURTHER ORDERED that this Complaint and Notice of Hearing shall be served on each Respondent personally or by certified or registered mail forthwith pursuant to Section 10.22 of the Commission's Rules, 17 C.F.R. § 10.22 (1999).
In the absence of an appropriate waiver, no officer or employee of the Commission engaged in the performance of the investigative or prosecutorial functions in this or any factual-ly related proceeding will be permitted to participate or advise in the decision upon this matter except as witness or counsel in proceedings held pursuant to notice.
|By the Commission.|
|Dated: March 30, 2000|
|Secretary of the Commission|
Commodity Futures Trading Commission