CFTC News Release 4410-00 (CFTC Docket 00-21)
For Release June 28, 2000
CFTC FILES ADMINISTRATIVE COMPLAINT AGAINST TIMOTHY BENGSON, CHARGING HIM WITH FRAUDULENTLY ALLOCATING CUSTOMER TRADES
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today the filing of an administrative complaint against Timothy Michael Bengson, last known to reside in St. Louis, Missouri. The CFTC complaint, filed on June 27, 2000, alleges that while a registered associated person (AP) of a registered futures commission merchant (FCM), Bengson fraudulently allocated commodity interest trades among customer accounts he handled and accounts in which he held a financial interest in violation of the anti-fraud provisions of the Commodity Exchange Act (CEA), as amended. Bengson is not currently registered with the Commission in any capacity.
Specifically, the complaint alleges that, at various times between June 1995 and February 1997, Bengson engaged in a fraudulent scheme to misappropriate and allocate trades to the detriment of his customer accounts and to the benefit of accounts in which he had a financial interest. The complaint specifically alleges that Bengson allocated trades throughout the time period, by, among other methods, changing or causing the account identification to be changed on office and/or floor order tickets after trades were executed and by instructing the FCM’s back office personnel to change account identification on trades after those trades were executed and assigned to customer accounts. The complaint alleges that during this period, one of the accounts Bengson used in the scheme had profits totaling approximately $50,000 and that 94 percent of the round-turn trades made in that account were profitable. The complaint also alleges that the FCM investigated Bengson’s trading, terminated his employment, and reported its investigation to the National Futures Association.
A public hearing has been ordered to determine whether the allegations are true and, if so, what sanctions are appropriate in the public interest. Possible sanctions include an order directing Bengson to cease and desist from violating the sections of the CEA charged, imposing a trading prohibition, and requiring Bengson to pay a civil monetary penalty as well as restitution to the defrauded customers.
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