McGough, et al. v. Bradford, et al. -- October 26, 2000

UNITED STATES OF AMERICA
Before the
COMMODITY FUTURES TRADING COMMISSION

JOSEPH M. and VIRGINIA S. MCGOUGH v. JAMES ARTHUR BRADFORD, THE HAMPTON GROUP, INC., IOWA GRAIN COMPANY, and PERRY GARTH WILSON	CFTC Docket No. 97-R116
JOSEPH M. and ROSE MARIE MCGOUGH v. JAMES ARTHUR BRADFORD, THE HAMPTON GROUP, INC., IOWA GRAIN COMPANY, and PERRY GARTH WILSON	CFTC Docket No. 97-R117 ORDER

On September 28, 2000, the Commission issued a decision in this matter dismissing the complaint in CFTC Docket No. 97-R117, affirming the damage award against respondents James Arthur Bradford ("Bradford"), The Hampton Group, Inc. ("Hampton Group"), and Iowa Grain Company ("Iowa Grain") in CFTC Docket No. 97-R116, and vacating the damage award against respondent Perry Garth Wilson ("Wilson") in CFTC Docket No. 97-R116 and remanding for further proceedings against Wilson. Complainant Virginia S. McGough ("McGough") has filed a motion seeking clarification of the award in CFTC Docket No. 97-R116.1 The motion noted that the Initial Decision awarded prejudgment interest to complainants but that the Commission's decision was silent on this issue. It sought clarification of the Commission's intent on this point.

When the Commission changes the award made in an initial decision, it generally only amends the erroneous portion of the presiding officer's damage award. The other elements of the presiding officer's award are implicitly affirmed. See, e.g., Johnson v. Benson-Quinn Commodities, Inc., CFTC Docket No. 98-R197 (CFTC Sept. 29, 2000), slip op. at 3. In these cases, the Administrative Law Judge ("ALJ") issued a single award of approximately $183,000 plus prejudgment interest based on allegations raised in two separate complaints.² The amount attributable to damages arising out of the conduct at issue in CFTC Docket 97-116 was $94,298.20. The Commission's decision affirmed this portion of the ALJ's award but vacated the portion attributable to damages arising out of the conduct at issue in CFTC Docket 97-117.

Our decision did reduce of the overall award, but this reflected a change to the ALJ's award of damages in CFTC Docket 97-117. The decision did not otherwise address the ALJ's award of prejudgment interest. Consequently, the decision implicitly affirmed the ALJ's award of prejudgment interest in CFTC Docket 97-116. In these circumstances, complainants' motion for clarification is denied.

IT IS SO ORDERED.³

By the Commission (Chairman RAINER and Commissioners HOLUM, SPEARS, NEWSOME and ERICKSON).

Jean A. Webb
Secretary of the Commission
Commodity Futures Trading Commission

Dated: October 26, 2000

1 McGough's motion indicated that both Joseph M. and Rose Marie McGough died while respondents' appeals were pending. It also noted that she has retained new counsel due to her inability to contact former counsel.

2 The ALJ indicated that the applicable rate of interest was 5.271% and that it should be calculated from the date that McGough closed her account to the date that the judgment was paid.

3 Under Sections 6(c) and 14(e) of the Commodity Exchange Act, 7 U.S.C. §§ 9 and 18(e)(1994), a party may appeal a reparation order of the Commission to the United States Court of Appeals for only the circuit in which a hearing was held; if no hearing was held, the appeal may be filed in any circuit in which the appellee is located. The statute also states that such an appeal must be filed within 15 days after notice of the order and that any appeal is not effective unless, within 30 days of the date of the Commission order, the appealing party files with the court a bond equal to double the amount of any reparation award.

A party who receives a reparation award may sue to enforce the award if payment is not made within 15 days of the date the order is served by the Proceedings Clerk. Pursuant to Section 14(d) of the Act, 7 U.S.C. § 18(d) (1994), such an action must be filed in a United States District Court. See also 17 C.F.R. § 12.407 (2000).

Pursuant to Section 14(f) of the Act, 7 U.S.C. § 18(f) (1994), a party against whom a reparation award has been made must provide to the Commission, within 15 days of the expiration of the period for compliance with the award, satisfactory evidence that (1) an appeal has been taken to the United States Court of Appeals pursuant to Sections 6(c) and 14(e) of the Act, or (2) payment has been made of the full amount of the award (or any agreed settlement thereof). If the Commission does not receive satisfactory evidence within the appropriate period, such party shall be automatically prohibited from trading on all contract markets and its registration under the Act shall be automatically suspended. Such prohibition and suspension shall remain in effect until such party provides the Commission with satisfactory evidence that payment has been made of the full amount of the award plus interest thereon to the date of payment.