UNITED STATES OF AMERICA
COMMODITY FUTURES TRADING COMMISSION
In the Matter of
CFTC Docket No. 97-12
CURTIS MCNAIR ARNOLD and
LONDON FINANCIAL, INC. ORDER
The attorney first retained by respondents in the above-captioned case has filed an application for interlocutory review of an order by the Administrative Law Judge ("ALJ") debarring him and his firm from further representation of Curtis M. Arnold and London Financial, Inc. in this matter. The attorney, William Sumner Scott, who heads The Scott Law Firm, P.A., also asks that proceedings before the ALJ be stayed pending Commission review of his application. Scott's clients, the respondents, have joined his application.(1)
The Division of Enforcement ("Division") has filed a response opposing the requested stay, but taking no position on the sanction imposed by the ALJ.(2)
The ALJ, acting sua sponte, debarred Scott and his firm upon finding that Scott willfully made false and misleading statements in a motion filed on behalf of respondents seeking leave to submit their answers to the complaint out of time. The ALJ determined after a hearing that Scott falsely represented (1) that he did not learn when the complaint was served on respondents until after the deadline for filing an answer had passed and (2) that the Division of Enforcement ("Division") did not advise him in a timely fashion that it would consent to an extension of time for answering the complaint.
The complaint was issued by the Commission on July 30, 1997. The ALJ held that Scott knew on August 1, 1997, that the complaint had been received by respondents and knew on August 4, 1997, that the Division would consent to an extension. (ALJ Bench Order of September 10, 1997). The record in this matter supports these findings.
The ALJ debarred Scott pursuant to Commission Rule 10.11(b), 17 C.F.R. § 10.11(b) (1997), which authorizes this sanction against an attorney or other representative for contemptuous conduct. Scott promptly sought interlocutory review pursuant to Rule 10.101(a)(2), 17 C.F.R. § 10.101(a)(2) (1997).
The ALJ's action did not constitute an abuse of discretion. A presiding officer enjoys wide latitude in the conduct of proceedings before him. See Rule 10.8(a), 17 C.F.R. § 10.8(a) (1997).(3) Scott submitted a written document to the ALJ that contained misleading statements. His misconduct was not mitigated simply because his misrepresentations concerned procedural matters that did not necessarily bear on the outcome of the case.
Scott acted improperly by seeking to mislead the court as to the reason for seeking an extension of time to answer the complaint. Any prejudice to respondents from the order is slight since Scott was dismissed from the proceeding at an early stage. In light of the foregoing, the petition for interlocutory review is granted and the action of the ALJ is affirmed. The motion to stay is denied as moot.
IT IS SO ORDERED.
By the Commission (Chairperson BORN and Commissioners DIAL, TULL, HOLUM
Catherine D. Dixon
Assistant Secretary of the Commission
Commodity Futures Trading Commission
Dated: October 17, 1997
1. The application for interlocutory review, styled "Notice of Appeal and Motion for Stay," states that it was filed on behalf of Scott, his firm and respondents "by their attorneys, Donald F. Mintmire, Esquire, and Mintmire & Associates . . . ." Notice of Appeal and Motion for Stay at 1 (Sept. 16, 1997). Though it describes Scott and his firm as "Former Legal Counsel," passim, the application was signed by both Scott and Mintmire. Id. at 14.
2. Scott and respondents subsquently filed a motion for leave to reply to the Division's response, and submitted the proffered response. The Division filed an opposition to the motion. The motion is granted.
3. See generally In re Ferragamo, [1990-1992 Transfer Binder] Comm. Fut. L. Rep. (CCH) ¶ 24,982 at 37,597-98 (CFTC Jan. 14, 1991) (discussing the ALJ's broad discretion in the conduct of enforcement proceedings).