Release: 4731-02
For Release: December 30, 2002


Robbins Futures, Inc. and Joel Robbins Ignored Signs of Ponzi Scheme

WASHINGTON, D.C. -- The Commodity Futures Trading Commission (CFTC) today announced the filing of a one-count complaint against Robbins Futures, Inc., a registered futures commission merchant (FCM), located in Chicago, Illinois, and its President, Joel Robbins, of Riverwoods, Illinois.

The enforcement action stems from the respondents’ alleged failures to supervise their employees’ handling of commodity interest accounts carried at Robbins Futures, including accounts that were used as part of a multi-million dollar commodity pool fraud prosecuted by the CFTC. CFTC v. Andrew Duncan and The Aurum Society, Inc., No. 01C6802 (N.D. Ill.) (See CFTC News Release 4565-01, September 5, 2001).

The CFTC’s complaint alleges that, from January 1999 through August 2001, the respondents failed to supervise the handling of several accounts either owned or managed by an individual named Andrew Duncan, and doing business as the Aurum Society. The accounts included four accounts Duncan opened in the name of the Aurum Society and three accounts Duncan managed for other individuals or entities, according to the complaint. The complaint further alleges that Robbins Futures repeatedly failed to recognize or ignored warning signs of Duncan’s illegal activities in these accounts.

Specifically, the complaint alleges that, between January 1999 and August 2001, Robbins Futures accepted deposits in excess of $2.4 million from third-party individuals and entities other than the accountholder, in the form of wires and cashier’s checks, for the benefit of the Aurum accounts and the managed accounts that Robbins Futures carried. The complaint alleges that Robbins Future’s procedures for identifying the source of funds in customer accounts were inadequate, and that Robbins Futures failed to investigate a suspicious pattern of large deposits followed by prompt withdrawals of funds in the Aurum accounts. The complaint alleges further that, between April 2001 and August 2001, Robbins Futures received a series of suspicious phone calls from several individuals regarding Duncan and his activities that employees of Robbins Futures failed to properly investigate and handle.

In addition to alleging that Robbins Futures and Robbins failed to supervise their employees’ handling of the accounts, the complaint alleges that Robbins failed to ensure that the firm had adequate compliance procedures and that the firm’s employees were properly trained. The complaint further alleges that Robbins had effective day-to-day management and control of the firm throughout the relevant time period, but did not act in good faith or knowingly induced Robbins Futures’ violations.

A public hearing has been ordered to determine whether the CFTC’s allegations are true and, if so, what sanctions are appropriate. Possible sanctions include civil monetary penalties of not more than $120,000 ($110,000 for violations occurring before October 23, 2000), or triple the monetary gain to the respondents, whichever is greater, for each violation of the Commodity Exchange Act and CFTC regulations, a cease and desist order, and registration sanctions.

The following CFTC Division of Enforcement staff are responsible for the case: David Terrell, William Heitner, Elizabeth Streit, and Rosemary Hollinger.

Media Enforcement Case Contact:

Rosemary Hollinger
Associate Director/Chicago Regional Counsel
CFTC Division of Enforcement
(312) 596-0520

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