UNITED STATES OF AMERICA
COMMODITY FUTURES TRADING COMMISSION
|GEORGE J. PERK, JR.||CFTC DOCKET NO. CRAA 98-1|
|NATIONAL FUTURES ASSOCIATION|
EVAN T. TUCKER, III
NATIONAL FUTURES ASSOCIATION
CFTC DOCKET NO. CRAA 98-2
ORDER DENYING STAY
George J. Perk, Jr. and Evan T. Tucker III have petitioned the Commission to stay disciplinary sanctions imposed by the National Futures Association ("NFA") pending their appeals to the Commission. The NFA opposes the stay. Because appellants have not made the showing required for a stay under Commission Rule 171.22(c) (1997), their petitions are denied.
In a decision issued by its Appeals Committee on February 18, 1998, the NFA affirmed the liability findings made by a hearing panel against Perk, Tucker and two other respondents. In re American Futures Group, Inc. et al., 97 APP-001 and 97-APP 002. The Appeals Committee also affirmed the sanctions imposed by the hearing panel. Perk, found liable for violating a variety of recordkeeping and compliance rules, was barred permanently from associating with or acting as a principal of any NFA member. Id. at 25. Tucker was found liable for violating NFA Compliance Rule 2-4, based on NFA’s finding that he provided improper sales training to a class of associated persons. He was suspended for two years from associating with or acting as a principal of any NFA member and subjected to registration restrictions for two years thereafter. Id. at 25-26.
Commission Rule 171.22(c) states that, in reviewing a petition to stay NFA sanctions, the Commission shall consider:
(1) The likelihood that a challenge to the merits of the decision will be successful; and
(2) The likelihood that the denial of the petition would result in irreparable harm to the petitioner; and
(3) The effect a grant of the petition would have on the opposing party; and
(4) The effect a grant or denial of the petition would have on the public interest.
17 C.F.R. § 171.22(c) (1997).
Perk argues that the NFA proceeding was marred by material misconduct. He asserts, inter alia, that NFA prosecutors fabricated exhibits, that NFA’s key witness presented perjured testimony, that a member of the hearing panel and a member of the Appeals Committee were biased against him, and that his own attorney cooperated with the NFA. He also argues that the penalty imposed is excessive. See generally Perk’s Affidavit and Petition for a Stay at 4-17 (filed Feb. 26, 1998). While Perk does not refer specifically to the requirements of Rule 171.22(c), his assertions of error appear directed toward showing his likelihood of success on the merits. He does not address the other elements of the stay standard.
In a separate petition, Tucker makes similar assertions of procedural flaws and also argues that (1) the evidence does not support NFA findings that he violated Compliance Rule 2-4, (2) the penalty imposed is excessive, and (3) NFA’s interpretation of Rule 2-4 is unreasonable. Tucker argues that he will be irreparably harmed if a stay is denied, noting that he has been in the futures industry "since he started as a runner for Shearson Lehman when he was 18 years old." Tucker’s Affidavit and Petition for a Stay at 41 (filed Feb. 26, 1998). He contends that denial of stay means he will "have to start another career just as he turns thirty." Id. Tucker also claims that neither the NFA nor the public interest will be harmed if a stay is granted, pointing out that "[i]n ten years no harm has come to the public" from his presence in the industry Id. at 42.
In opposing the petitions of Perk and Tucker, the NFA argues that neither appellant has or can demonstrate irreparable harm flowing from the registration sanctions imposed in this matter because both ceased to be registered before the Appeals Committee issued its decision. NFA Opposition at 6-8 (filed Mar. 9, 1998). Commission records reveal that on August 20, 1997, the registrations of Perk, AFG and Reeves were suspended, along with their trading privileges on all contract markets, when they failed to make restitution payments required by a Commission order issued in settlement of an administrative enforcement action against them. See In re American Futures Group, et al., Docket No. 95-15, Order of Nov. 22, 1996 (making findings and imposing remedial sanctions) and Order of Aug. 20, 1997 (notice of effective date of nonpayment sanctions). The NFA also states that Tucker has not been registered since December 19, 1996. NFA Opposition 8-9. In a response to NFA’s Opposition, Tucker states that "[t]he fact that [he] is not currently registered does not mean that [he] would not like to be registered." Tucker Motion to Strike at 9 (filed Mar. 13, 1998). The NFA also argues that appellants have not satisfied the other elements of the stay standard.
Perk’s failure to address three of the four elements of the stay standard is sufficient, without more, to doom his petition. Furthermore, as the NFA points out, neither Perk nor Tucker is in a position to demonstrate irreparable harm, given the current registration status of each. In the circumstances, any injury posed by the NFA’s sanctions is neither "certain" nor "great." See Butler v New York Cotton Exchange, [1990-1992 Transfer Binder] Comm. Fut. L. Rep. (CCH) ¶ 25,089 at 38,080 (CFTC July 22, 1991) ("[a] party seeking a stay must demonstrate that the injury claimed is ‘both certain and great’"), quoting Cuomo v. U.S. Nuclear Regulatory Comm’n, 772 F.2d 972, 976 (D.C. Cir. 1985). Nor do the procedural flaws asserted by appellants adequately show that they are likely to succeed on the merits. That element of the stay standard must be met "by more than a mere showing that serious questions exist" to be resolved on appeal. Butler, ¶ 25,090 at 38,080.
For the foregoing reasons, the petitions to stay are denied.
IT IS SO ORDERED.
By the Commission (Chairperson BORN and Commissioners TULL, HOLUM and SPEARS).
Jean A. Webb
Secretary of the Commission
Commodity Futures Trading Commission
Dated: April 2, 1998