CFTC News Release 4366-00 (CFTC Docket No. 00-05)
For Release February 22, 2000
CFTC FILES ADMINISTRATIVE COMPLAINT AGAINST FORMER CERES TRADING GROUP BRANCH MANAGER DARRYL M. OSLER CHARGING THAT HE COMMITTED COMMODITY FRAUD
CFTC Alleges that Osler, of Delray Beach, Florida, Instructed Brokers Under His Supervision to Make False and Misleading Statements to Customers in Order to Convince Them to Open Accounts and to Place Trades
WASHINGTON – The Commodity Futures Trading Commission (CFTC) announced today the filing of a two-count anti-fraud administrative complaint against Darryl M. Osler of Delray Beach, Florida, a former branch manager of the Delray Beach Florida office of Ceres Trading Group, Inc.
The CFTC complaint, filed on February 18, 2000, alleges that Osler committed fraud in the solicitation of customers by instructing associated persons (APs) of Ceres working for him to make false and misleading statements in violation of the Commodity Exchange Act (section 4c(b)) and CFTC regulations 32.9 and 33.10. The complaint also alleges that Osler violated regulation 166.3 by failing to supervise diligently APs working for him in Ceres’ Delray Beach office.
Specifically, the CFTC complaint alleges that between January 1996 and May 1999, Osler, a co-manager of Ceres’ Delray Beach Florida office who worked directly with APs on developing sales solicitations, instructed APs to make false and misleading statements to customers regarding the profitably of trading options on commodity futures contracts and to impart a sense of urgency to trade that was false and unwarranted.
The CFTC complaint further alleges that Osler instructed APs to use one sales script which mislead customers about the profitably of trading heating oil options, telling them that they could take advantage of the seasonal tendency of heating oil prices to increase in the winter to turn a profit, and another sales script which misrepresented corn options prices as moving cent for cent with changes in the price of the underlying futures contract, thus underestimating the price change necessary in a futures contract to make a profit. The CFTC complaint charges that the APs’ solicitations were false and misleading because they misstated and failed to disclose facts material to customers’ decisions to open accounts with Ceres and to trade options on commodity futures contracts.
A public hearing has been ordered to determine whether the allegations are true, and, if so, what sanctions are appropriate in the public interest.
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