Jordan v. Chippas - May 11, 1998

Complainants Thomas and Scarlett Jordan seek sanctions against respondent William Mathew Chippas for failing to pay a reparations award in full. See Petition for Automatic Suspension (filed March 9, 1998). For the reasons set forth below, the sanctions provided for in Commission Rule 12.407(c), 17 C.F.R. � 17.407(c) (1998), are hereby imposed on Chippas.

On July 9, 1997, the Judgment Officer issued a default order in this matter, pursuant to which he ordered Chippas to pay complainants damages of $2,437.50 plus interest and $125 in costs. The default order became a final order of the Commission on August 15, 1997, and Chippas received notice to pay the reparation award within 15 days.

On August 30, complainants executed a document styled a "General Release," pursuant to which they agreed to accept payment of the award in five installments (totaling $2,695.58), with the final payment due on or before January 1, 1998. Chippas paid three installments totaling $1,750. The General Release states in pertinent part as follows:

This General Release is subject to a condition subsequent which is that all installment payments after the date of this General Release must be made on the dates and in the manner provided. Failure to meet any one such installment . . . shall render this agreement null and void . . . .

See Attachment C to Petition for Automatic Suspension (filed Mar. 9 1998). Chippas has not filed a response to the petition.

A respondent who fails to satisfy a reparation awards within 15 days after the award becomes final is to be automatically suspended from registration and prohibited from trading on any contract market. See Section 14(f) of the Commodity Exchange Act, 7 U.S.C. � 18(f) (1994). It is the respondent's duty to apprise the Commission that an award has been satisfied. See Commission Rule 12.407(c), 17 C.F.R. � 12.407(c) (1998). Rule 12.407(c) requires that respondents demonstrate satisfaction by filing with the Proceedings Clerk either "[a] copy of a certified check or the equivalent showing satisfaction of the award; or [a] sworn release executed by each recipient of a reparation award . . . ."

Chippas has not paid the award in full, and the release by its terms is now a nullity. Accordingly, Chippas shall be prohibited from trading on all contract markets, and his registration shall be suspended immediately. These sanctions shall remain in force until he pays the damages awarded by the Judgment Officer--$2,437.50, plus interest compounded annually at the rate of 5.65% from September 6, 1996, to the date of payment, plus costs in the amount of $125, less the $1750 Chippas has already paid. See Default Order and Reparation Award (July 9, 1997).