UNITED STATES OF AMERICA

Before the

COMMODITY FUTURES TRADING COMMISSION

 

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HUSEIN MOHAMED HAEKAL

                                                                                              DOCKET No. 93-R109
v. 

                                                                                               ORDER
REFCO, INC. and RONALD VON NEEFE 

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On Sep tember 26, 1997 we issued an order in the above-cap tioned case holding that comp lainant Husein Mohamed Haekal had neither p osted the bond required of nonresident comp lainants to gain access to the rep arations forum nor adequately demonstrated that the bond requirement did not ap p ly to him and could be waived. The order considered and rejected a German exp ert legal op inion p urp orting to sup p ort the right of German residents to a waiver. Haekal was ordered to p ost the bond or to "submit a sufficiently sup p orted and documented waiver request addressing the bond law ap p licable to U.S. resident comp lainants in the Federal Rep ublic of Germany." Haekal v. Refco, Inc., [Current Transfer Binder] Comm. Fut. L. Rep . (CCH) & 27,162 at 45,554 (CFTC Sep t. 26, 1997).

Haekal submitted a timely resp onse on October 17, 1997 in which he asserted, with sup p orting documentation, that Commission staff had assured him at the outset of this p roceeding that no bond was required. Haekal states that he reasonably relied on such assurances. He argues that in light of such assurances, he "had every reason to believe that the requested and received waiving of the security bond fulfills the jurisdiction of the CFTC." Haekal Rep ly at 2. Haekal finally argues that, if we remain unp ersuaded that recip rocity p rincip les entitle him to have the bond waived, he nevertheless is entitled to a waiver p ursuant to the reasoning of the Sep tember 26, 1997 order by virtue of certain cash assets he owns in the United States.

Resp ondent Refco, Inc. op p oses the waiver, arguing that Haekal has merely reiterated arguments we earlier rejected and has failed to come forward with p ersuasive new authority sup p orting his waiver request. Refco, Inc. seeks dismissal of the comp laint. Resp ondent Ronald von Neefe has not rep lied to Haekal's resp onse to the Commission's order.

The bond requirement is statutory and nonwaivable. See Section 14(c) of the Act, 18 U.S.C. ' 18(c) (1994); see also 17 C.F.R. ' 12.13(b)(3) (1997). A nonresident comp lainant must furnish a bond in double the amount of the award sought, unless the comp lainant is the resident of a country which p ermits the filing of a comp laint by a resident of the United States without the furnishing of a bond, in which case the Commission may waive the bond. Though Haekal may initially have been justified in relying on information p rovided to him by Commission staff, once we sp oke in our Sep tember 26, 1997 order, Haekal no longer could rely on a discredited determination that he need not p ay the bond.

As a sep arate matter, Haekal misreads our order to the extent that he claims it sup p orts his waiver request in view of his financial assets in the United States. We stated that under the 1954 German-American Treaty of Friendship / and a related p rotocol, a United States national "is exemp t from p osting security in a German court only if he or she has a p ermanent residence or corp orate branch office in Germany or if he or she owns real p rop erty sufficient to meet the costs in the district of the court before which the action is p ending."&27,162 at 45,543. The reference to "real" p rop erty means land, not the cash assets that Haekal says he owns in this country. Furthermore, we held that the Treaty did not p rovide the typ e of recip rocity required by Section 14(c) of the Act./

Though Haekal failed to establish his right to have the bond waived, he resp onded to our show cause order on a p ro se basis, and his continued assertion of his waiver claim was ap p arently made in good faith. We therefore grant Haekal 45 days to p ost the bond required by Rule 12.13(b). Failure to do so will result in dismissal of this matter.

IT IS SO ORDERED.

By the Commission (Chairp erson BORN and Commissioners TULL, HOLUM, and Sp EARS).

 

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Jean A. Webb

Secretary of the Commission

Commodity Futures Trading Commission

Dated: February 23, 1998