UNITED STATES OF AMERICA
COMMODITY FUTURES TRADING COMMISSION
|In the Matter of:||)||CFTC Docket No. SD 00-03|
|DAVID ITZKOWITZ,||)||COMPLAINT AND NOTICE|
NOTICE OF INTENT TO SUSPEND,
REVOKE, OR RESTRICT DAVID
ITZKOWITZ'S REGISTRATION AS A FLOOR TRADER AND BROKER
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 and is prepared to prove, that:
1. David Itzkowitz ("Itzkowitz" or "Registrant") resides at 11 Edgar Court, Huntington, New York 11743.
2. Itzkowitz was a member of the Coffee Sugar & Cocoa Exchange (the "Exchange") from approximately January 1982 until December 1996, and, during that time, he traded for his own account as well as for customers in the coffee pit on the Exchange.
3. Since July 25, 1995, Itzkowitz has been registered with the Commission as a floor broker ("FB"), pursuant to Sections 4e and 4f of the Commodity Exchange Act, as amended (the "Act"), 7 U.S.C. §§ 6e and 6f (1994). Beginning on July 25, 1995, Itzkowitz's FB registration was subject to conditions for two years as a result of the Commission's Opinion and Order in In the Matter of David Itzkowitz, CFTC Docket No. SD 95-20 (July 25, 1995) (the "1995 SD Proceeding Order"). Itzkowitz was previously registered as a FB with the Commission from approximately January 1982 until December 1984.
1995 Commission Statutory Disqualification Proceeding
4. On July 25, 1995, the Commission issued the 1995 SD Proceeding Order accepting Itzkowitz's offer of settlement and finding that Itzkowitz was statutorily disqualified from registration as a FB under Section 8a(3)(A) and 8a(3)(M) of the Act, 7 U.S.C. §§ 12a(3)(A) and 12a(3)(M) based on his extensive prior Commission and Exchange disciplinary history. In its 1995 SD Proceeding Order, the Commission granted Itzkowitz's application for registration as a FB subject to certain specified conditions that were to remain in effect until two years after the date of the 1995 SD Proceeding Order.
The Exchange Action Against Itzkowitz in 1997
5. In April 1997, the Exchange issued a Notice of Charges alleging that based on trading occurring in August 1995, Itzkowitz and another floor member violated Membership Rule 1.31(11) (engaging in accommodation trading) and Floor Trading Rule 3.03(a)(i) (engaging in non-competitive trading) in executing certain trades. The Exchange also charged Itzkowitz with violating Floor Trading Rule 3.17(a) (failing to report a sale) and Floor Trading Rule 3.18(a) (failing to cross out unused lines, skipping lines between trades and mis-sequencing trades on his trading cards). Itzkowitz engaged in the August 1995 trading, alleged in the Notice of Charges, within one month of the Commission issuing the 1995 SD Order granting him conditioned registration as a FB.
6. After a full adjudication before the Hearing Panel of the Business Conduct Committee and the Appeals Committee of the Exchange, the Exchange found that Itzkowitz engaged in eleven instances of accommodation trading in August 1995 in violation of Membership Rule 1.13(11). Itzkowitz also pled guilty to violating Floor Trading Rules 3.17(a) and 3.18(a).
7. For the accommodation trading, the Exchange ordered Itzkowitz to pay a $5,000 fine and to cease and desist from further violating Membership Rule 1.13(11). For the failure to report a sale and recordkeeping charges, the Exchange ordered Itzkowitz to pay a $2,500 fine and to cease and desist from further violations of Floor Trading Rules 3.17(a) and 3.18(a).
8. The facts set forth in paragraphs 1-7 above, constitute other good cause under Section 8a(3)(M) of the Act, 7 U.S.C. § 12a(3)(M) (1996), for suspending, revoking or restricting Itzkowitz's floor broker registration under Section 8a(4) of the Act, 7 U.S.C. § 12a(4) (1996).
Pursuant to Section 3.60(a) of the Regulations, 17 C.F.R. § 3.60(a), the Registrant is hereby notified that a proceeding shall be conducted in accordance with the provisions of Section 3.60 of the Regulations, 17 C.F.R. § 3.60, on the following questions:
1. Whether the Registrant is subject to statutory disqualification from registration under Section 8a(3)(M) of the Act, 7 U.S.C § 12a(3)(M) (1996) as set forth in Section I above; and
2. If the answer to question 1 is affirmative, whether the registration of the Registrant should be suspended, revoked, or restricted pursuant to Part 3 of the Regulations, 17 C.F.R. Part 3. Such proceeding shall be held before an Administrative Law Judge in accordance with Section 3.60 of the Regulations, and all post-hearing procedures shall be conducted pursuant to Sections 3.60(i) through 3.60(j) of the Regulations, 17 C.F.R. §§3.60(i) through 3.60(j).
In accordance with the provisions of Section 3.60(a)(3) of the Regulations, 17 C.F.R. § 3.60(a)(3), the Registrant is entitled to file a response challenging the evidentiary basis of the statutory disqualification alleged at Section I, or to show cause why, notwithstanding the accuracy of the allegations, his registration should nevertheless not be suspended, revoked, or restricted. Such a response shall be filed with the Hearing Clerk, Office of Hearings and Appeals, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581, and served upon Charles J. Sgro, Regional Counsel, Division of Enforcement, Commodity Futures Trading Commission, at One World Trade Center, 37th Floor, New York, New York 10048, within thirty (30) days after service of this Notice upon Registrant in accordance with the provisions of Section 3.60(b) of the Regulations, 17 C.F.R. §3.60(b). If the Registrant fails to file a timely response to this Notice, the allegations set forth herein shall be deemed to be true and the presiding officer may issue an Order of Default in accordance with the provisions of Section 3.60(a)(4) of the Regulations, 17 C.F.R. §3.60(a)(4).
The Hearing Clerk shall serve this Notice of Intent to Suspend, Revoke or Restrict David Itzkowitz's Registration as a Floor Broker upon Registrant by registered or certified mail pursuant to Section 3.50 of the Regulations, 17 C.F.R. §3.50.
|By the Commission.|
|Dated: March 30, 2000|
|Secretary of the Commission|
Commodity Futures Trading Commission