UNITED STATES OF AMERICA
COMMODITY FUTURES TRADING COMMISSION
|HUSSEIN M. HAEKAL||CFTC No. 93-R109|
|REFCO, INC. and RONALD VON NEEFE|
On July 13, 1998, the Commission issued an order dismissing complainant Haekal's appeal because he failed to comply with the statutory bond requirement applicable to nonresident reparation complainants under section 14(c) of the Commodity Exchange Act, 7 U.S.C. § 18(c) (1994), and Commission Rule 12.13(b), 17 C.F.R. § 12.13(b) (1998). Haekal v. Refco, Inc. et al., CFTC No. 93-R109, 1998 WL 390811 (CFTC July 13, 1998). The Commission observed that the April 8, 1998 deadline had been extended at Haekal's request to April 21, 1998. Moreover, Haekal had been given an extra 30 days to file the bond and that period had expired on May 21, 1998. Id. Thus, because Haekal had not posted the bond as of July, despite having been given "numerous opportunities" to do so, the Commission dismissed his appeal. Id. On July 24, 1998, Commission staff received a bond from Haekal, but returned it in light of the Commission's order of dismissal. Letter of J. Douglas Richards, Deputy General Counsel, Office of General Counsel, to Philip A. McGee, Vice President, Bond, Travelers Property Casualty, dated July 27, 1998.
In a pleading filed July 30, 1998, Haekal requests that the Commission accept his bond. He asserts that, during a conversation with a Commission staff member on or about July 7, 1998, he was informed that the Commission would not lower the bond amount, as he had requested on June 11, 1998. He states that his surety then issued the bond on July 20, 1998-before he received the Commission's July 13, 1998 order dismissing his appeal. Haekal also submits a letter from his surety company. It states that on July 8, 1998, Haekal instructed the surety company to execute the bond with an effective date of August 1, 1998. The letter also states that, according to Haekal, he was "led to believe" by Commission staff that an August 1, 1998 effective date was acceptable to the Commission and that staff did not inform him that the Commission was in the process of dismissing his appeal or that he should immediately file the bond. Letter of Philip Alan McGee, Vice President, Bond, Travelers Property Casualty, to J. Douglas Richards, Deputy General Counsel, Office of General Counsel, dated July 30, 1998. We have made inquiries concerning this matter with the staff member who spoke with Haekal. She has satisfied us that she did not mislead Haekal.
Haekal has, in effect, filed a motion for reconsideration. The Commission's Part 12 Rules governing reparation actions do not provide for motions for reconsideration, but such motions are cognizable as applications for a form of relief not otherwise specifically provided for. See Rule 12.308, 17 C.F.R. § 12.308 (1998). Motions for reconsideration may be granted in "extraordinary circumstances." Kohler v. Merrill Lynch, Pierce Fenner & Smith, [1986-1987 Transfer Binder] Comm. Fut. L. Rep. (CCH) ¶ 23, 437 at 33,173 (CFTC Dec. 30, 1986). Such circumstances include a clear and convincing showing of fraud on the forum by the adverse party; the discovery of previously unknown and non-discoverable evidence which would probably produce a different result; a factual error in a jurisdictional ruling (e.g., a respondent's registration status); or the type of egregious factual or legal error which goes to the heart of the challenged decision's validity. Id.
Haekal's June 11, 1998 request to lower the bond amount was made well after his second extension of time to file the bond had expired on May 21, 1998. We do not find persuasive Haekal's vague assertion, made only through hearsay from his surety, that the staff member had "led [him] to believe" that a bond issued with an effective date of August 1, 1998, would be acceptable to the Commission. No staff member had authority to do so. The Commission received Haekal's bond on July 24, 1998-eleven days after the Commission issued its July 13, 1998 order. We find that Haekal has not shown the type of
extraordinary circumstances that would justify granting a motion for reconsideration of our July 13, 1998 order. We therefore deny Haekal's motion for reconsideration.
IT IS SO ORDERED.1
By the Commission (Chairperson BORN and Commissioners HOLUM, SPEARS and NEWSOME; Commissioner TULL dissenting).
Jean A. Webb
Secretary of the Commission
Commodity Futures Trading Commission
Dated: November 18, 1998
1 Under Sections 6(c) and 14(e) of the Commodity Exchange Act, 7 U.S.C. §§ 9 and 18(e), 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 clerk of the court a bond equal to double the amount of the reparation award.
Haekal v. REFCO, Inc. and Ronald Von Neefe, CFTC Docket No. 93-R109
Commissioner John E. Tull, dissenting
Though Mr. Haekal did not follow our rules and meet the designated time deadlines with precision, I would accept his surety bond. The fact that he attempted to file the bond before learning of the Commission's July 13, 1998 Order dismissing his complaint satisfies me that he was acting in good faith. This is of particular significance, since he was acting on his own behalf without the benefit of counsel.
On the facts of this particular case, I believe Mr. Haekal has shown sufficient justification to grant him the relief he seeks. Therefore, I respectfully dissent.
John E. Tull, Jr., Commissioner
November 17, 1998