Release: 4621-02 (CFTC Docket #02-09)
For Release: March 20, 2002
CFTC FILES ENFORCEMENT ACTION AGAINST FOUR CSCE FLOOR BROKERS, CHARGING THEM WITH UNLAWFULLY TRADING COFFEE FUTURES
Joseph Defrancesco, Ronald Kilbride, and Brian Thornton Charged with
Fraud, Bucketing of Customer Orders, and Reporting Non-Bona Fide
Defrancesco, Kilbride, Thornton, and Marc Greenstein Also Face Charges of Noncompetitive Trading, Illegal Wash Sales, and Accommodation Trades
WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today the filing of an administrative action against Joseph Defrancesco of Long Beach, New York; Brian Thornton, also of Long Beach; Ronald Kilbride of Morganville, New Jersey; and Marc Greenstein of East Hills, New York, all of whom are CFTC-registered floor brokers. The CFTC complaint alleges that, from February 2000 through November 2000, the respondents unlawfully executed coffee futures trades on the Coffee, Sugar & Cocoa Exchange (CSCE), a division of the New York Board of Trade.
Specifically, according to the complaint, Defrancesco and Kilbride fraudulently executed trades in the coffee futures ring of the CSCE, by knowingly or recklessly trading ahead of executable customer orders on the same side of the market and allocating trades to their personal accounts at better prices than those received by their customers. Defrancesco, Kilbride, and Thornton indirectly bucketed their customer orders by noncompetitively trading for their own accounts indirectly opposite their customer orders, the complaint also alleges. By engaging in noncompetitive trading, the complaint alleges, Defrancesco, Kilbride, and Thornton also reported prices on their trading cards to their customers and to the CSCE that were not bona fide. The complaint further charges that Defrancesco, Greenstein, Kilbride, and Thornton traded noncompetitively and entered into illegal wash sales and accommodation trades by assisting Defrancesco or Kilbride in taking the opposite side of their customers’ orders. Defrancesco and Kilbride also failed to record required trading information on their trading cards, according to the complaint.
A public hearing has been ordered to determine whether the allegations are true and, if so, what sanctions are appropriate and in the public interest. Possible sanctions include a cease and desist order, restitution to defrauded customers, civil monetary penalties, trading prohibitions, and registration revocations, suspensions or restrictions.
The following CFTC Division of Enforcement staff are responsible for the case: Richard Wagner, John Dunfee, Jason Gizzarelli, Elizabeth Hastings, and Margaret Kanyan.
Dan Nathan, Deputy Director
CFTC Division of Enforcement
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