For Release: July 15, 2002
COFFEE COMMODITY TRADERS BRUCE MILLER AND DEIRDRE ANDERSON CHARGED WITH FRAUDULENT TRADE ALLOCATION SCHEME
George Lamborn and Richard Lani Sr. Alleged To Have Failed to Diligently Supervise Miller and Anderson’s Trading
CSCE Floor Brokers, Daniel Lipton and Kenneth Lawson, Charged With Failing to Obtain Required Customer Account Identification
WASHINGTON, DC – The Commodity Futures Trading Commission (CFTC) announced today the filing of an administrative complaint against Bruce Miller (Miller), currently residing in Barcelona, Spain, and Deirdre Anderson (Anderson) of Staten Island, New York, charging them with fraudulently allocating trades in coffee futures and allowing certain preferred customers including, in part, those with whom Miller had some familial, business or financial interest, to earn profits in excess of $400,000 while trading at Lamborn Securities, Inc. (LSI), a now defunct introducing broker.
The CFTC complaint charges George Lamborn (Lamborn), of Southampton, New York, president of LSI, and Richard Lani (Lani) of Princeton, New Jersey, with failing to supervise diligently Miller’s and Anderson’s trading at Lamborn. In addition, the complaint alleges that Daniel Lipton (Lipton) of Long Beach, New York, and Kenneth Lawson (Lawson) of Brooklyn, New York, both floor brokers on the Coffee, Sugar and Cocoa Exchange, Inc., failed to obtain required customer account identification from Miller and Anderson when they were placing orders to the floor of the exchange.
The complaint, filed on July 15, 2002, specifically alleges that from March until July 1997, and from June to July 1998, Miller and Anderson fraudulently allocated winning trades in coffee futures to certain preferred customers which included Miller’s family, business associates and entities in which Miller had a hidden financial interest. According to the complaint, Miller and Anderson and others under their direction at LSI placed over 400 customer orders buying and selling over 3,600 coffee futures contracts with clerks working for Lipton, Lawson and another floor broker without providing sufficient customer account identification. After the orders were executed and Miller and Anderson were able to determine which trades were profitable, they allocated the winning trades to their preferred customers and losing trades to other customers, according to the complaint.
The complaint also alleges that Lamborn and Lani failed to detect this fraudulent allocation scheme because they did not diligently supervise Miller and Anderson. Lamborn and Lani failed to design and implement a system of supervision to review adequately office order tickets and investigate irregular trading activity.
A public hearing has been ordered to determine whether the allegations are true, and, if so, what sanctions would be appropriate in the public interest.
The following CFTC Division of Enforcement staff are responsible for this case: Charles J. Sgro, Lenel Hickson, Jr., Beth R. Morgenstern, Steven Ringer, Christina Kang, and John Cipriani.
A copy of the CFTC’s complaint may be obtained at www.cftc.gov.
Charles J. Sgro
Regional Counsel, Eastern Regional Office
CFTC Division of Enforcement (646) 746-9759
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