UNITED STATES OF AMERICA
COMMODITY FUTURES TRADING COMMISSION
PAUL S. MCKNIGHT
DOCKET NO. CRAA 01-01
|NATIONAL FUTURES ASSOCIATION|
Paul S. McKnight has appealed from a
decision of the National Futures Association ("NFA")
imposing a $5,000 money penalty in light of McKnight's failure to
conform his conduct to high standards of commercial honor and just and
equitable principles of trade.1 He
has also filed a petition for a stay of his obligation to pay the
money penalty while the Commission considers his appeal. McKnight
argued that NFA's disciplinary proceeding was flawed by a refusal
to consider mitigating circumstances or alternative explanations and a
failure to evaluate his intent in undertaking the challenged conduct.
He contended that denial of the stay would lead to irreparable harm
because he cannot pay the money penalty and his failure to pay will
result in the loss of his livelihood. Finally, he claimed that neither
NFA nor the public interest would be harmed by the granting of his
petition. NFA opposed the petition arguing that McKnight failed to
meet the burden imposed on him by Commission Rule 177.22.
Under Commission Rule 171.22, the Commission evaluates petitions for a stay pending appeal in terms of four factors: (1) whether petitioner is likely to prevail on the merits; (2) whether petitioner will be irreparably harmed without a stay; (3) the effect that the issuance of a stay will have on the opposing party; and (4) the effect that either the issuance or denial of a stay will have on the public interest.
In this instance, petitioner's
showing on both likelihood of success on the merits and irreparable
harm are unpersuasive. His petition does not provide sufficient detail
about the alleged errors by NFA to permit a reasoned assessment of the
likelihood that Commission review will lead to a change in the result
of NFA's decision. Moreover, McKnight failed to submit either an
affidavit or other reliable evidence to support his claim that he is
unable to pay the $5,000 fine that NFA imposed. Consequently, we
cannot reliably infer that the failure to grant his petition will
result in the loss of his livelihood. Absent such an inference,
McKnight cannot establish that he is likely to suffer irreparable harm
in the circumstances presented.2
Accordingly, McKnight's petition is denied.
IT IS SO ORDERED.
By the Commission (Chairman RAINER and
Commissioners HOLUM, SPEARS, NEWSOME and ERICKSON).
Jean A. Webb
Secretary of the Commission
Commodity Futures Trading Commission
Dated: November 1, 2000
1 After a hearing, NFA also found that McKnight had traded the accounts of several individuals on a discretionary basis even though such authority was not granted in writing.
2 The Commission has consistently held that payment of a money penalty that can be recovered if petitioner prevails on the merits does not support a finding of irreparable harm. In re Slusser, [1998-1999 Transfer Binder] Comm. Fut. L. Rep. (CCH) ¶ 27,743 (CFTC Aug. 19, 1999); Global Futures Holdings, Inc. v. NFA, [1998-1999 Transfer Binder] Comm. Fut. L. Rep. (CCH) ¶ 27,467 (CFTC Nov. 24, 1998).