CFTC News Release 4393-00 (CFTC Docket No. 99-17)
For Release April 10, 2000
CFTC ACCEPTS SETTLEMENT OFFERS OF FORMER REFCO PHONE CLERKS MARGARET DULL AND RICHARD MARISIE IN CONNECTION WITH ORDER-TAKING AND RECORDKEEPING VIOLATIONS
CFTC Order Restricts And Conditions Dull’s and Marisie’s Floor Activities For Two Years and Requires Them to Pay $15,000 Each in Civil Monetary Penalties
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today the issuance of an order accepting offers of settlement from Margaret Dull and Richard Marisie, both of the Chicago area, in connection with a CFTC complaint filed against them on September 30, 1999 (see CFTC News Release 4317-99, September 30, 1999).
The CFTC order finds that from at least January 1994 to December 1995, Dull and Marisie failed to comply with order-taking and record-keeping requirements in violation of section 4g of the Commodity Exchange Act (CEA) and CFTC regulation 1.35(a-1)(2). As the order finds, during this time, Marisie and Dull were employed by Refco, Inc. (Refco), a registered futures commission merchant, as phone clerks at Refco’s treasury bond futures and options desk at the Chicago Board of Trade (CBOT).
As the CFTC order finds, this matter arises out of a fraudulent trade allocation scheme perpetrated by an introducing broker, Capital Insight Brokerage Inc. (Capital Insight), and its owner and president, S. Jay Goldinger (Goldinger). The order finds that from at least January 1994 to December 1995, Goldinger traded for his customers through Refco’s treasury bond desk at the CBOT and was able to fraudulently allocate trades among his customers, based on the trades’ profitability, by, in part, not providing account identification for orders until after the trades were executed, and by causing Refco employees to change account numbers for executed trades.
The CFTC order entered against Dull and Marisie specifically finds that from at least January 1994 through December 1995, they accepted orders for treasury bond futures contracts and options on treasury bond futures contracts from Goldinger for Refco’s customer accounts and did not obtain account identification at the time many of the orders were received from Goldinger. The CFTC order also finds that Dull and Marisie filled in and changed account identification on orders already executed. The order finds that because they failed to record account identification on many of the floor order tickets immediately upon receipt of the orders from Goldinger, Dull and Marisie, as registered floor brokers, directly violated section 4g of the CEA and CFTC regulation 1.35(a-1)(2). The order also finds that Dull and Marisie aided and abetted Refco’s violations of section 4g of the CEA and CFTC regulation 1.35(a-1)(1) and (2).
Dull and Marisie Each to Pay $15,000 in Civil Monetary Penalties
Without admitting or denying the allegations of the complaint or the findings of the order, Dull and Marisie have consented to the entry of the CFTC order that:
-- finds that they each violated section 4g of the CEA and CFTC regulation 1.35(a-1)(2), and aided and abetted violations of section 4g and regulation 1.35(a-1)(1) and (2);
-- directs them to cease and desist from further violations as charged;
-- restricts Marisie’s registration as a floor broker for two years and conditions Dull’s registration should she register in the next two years;
-- restricts Dull’s and Marisie’s order-taking activities with respect to orders placed for others for two years; and
-- requires Dull and Marisie each to pay $15,000 in civil monetary penalties.
The litigation continues against the other respondents named in the complaint.
The CFTC Has Filed and Settled Related Actions Against Capital Insight and Goldinger, and Against Refco
On November 12, 1999, the federal district court for the Central District of Los Angeles entered an order of permanent injunction and other equitable relief against Goldinger and Capital Insight based on the fraudulent allocation scheme in a related action. The court's order required them to disgorge $6 million in ill-gotten gains and enjoined them from, inter alia, violating the CEA and acting in any capacity for which CFTC registration is required (see CFTC News Release 4335-99, November 8, 1999). On December 13, 1999, Goldinger pled guilty in federal district court to wire fraud in connection with the fraudulent allocation scheme.
On May 24, 1999, the CFTC filed and settled a related action against Refco, charging order-taking and recordkeeping violations and a failure to supervise in connection with the trade allocation scheme. Refco was ordered to pay $7 million, to cease and desist from further violations, and to conduct an internal review of its compliance policies and procedures (see CFTC News Release 4269-99, May 24, 1999).
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