Release: 4782-03 (CFTC Docket No. 96-04)
For Release: May 1, 2003
FLOOR BROKERS SETTLE CHARGES OF UNLAWFULLY TRADING CATTLE FUTURES
CFTC Finds that Ronald M. Schiller, aided by Eugene J. Chesrow, Engaged in a Wide Variety of Trading Schemes that Cheated Customers
WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today the issuance of an order settling a pending action against Ronald M. Schiller (Schiller) of Highland Park, Illinois, who is registered with the CFTC as a floor broker, and Eugene J. Chesrow, Jr., of Chicago, Illinois, a former floor broker.
The order arises out of a 1996 CFTC administrative proceeding brought against Schiller, Chesrow, and another former floor broker, Emmett J. Whealan, which alleged that during a period of twenty months in the early 1990s, they unlawfully executed live cattle futures trades on the Chicago Mercantile Exchange (CME) to the detriment of Schiller’s customers (see CFTC News Release #3905-96, April 18, 1996). After these charges were brought, Schiller ceased filling customer orders on the CME.
The CFTC’s order, entered on April 29, 2003, finds that between 1991 and 1993, as a floor broker in the back months of the CME’s live cattle futures pit, Schiller engaged in a variety of illegal trading practices that cheated and defrauded customers and benefited his own account. Among other things, the order states that Schiller: 1) took profitable trades for his personal account that he originally executed on behalf of customers; 2) gave customers losing trades that he had originally made for himself; and 3) changed prices on fills given to orders. The order also states that Schiller engaged in other wrongful trading practices with customer orders.
The order further finds that Whealan and Chesrow aided and abetted Schiller’s fraud and entered into trades accommodating Schiller’s indirect bucketing and offsetting of customers’ orders. In addition, the order states that all three respondents made noncompetitive trades and violated record-keeping rules.
Schiller Agrees to Pay Penalty and Have Registration Revoked
Schiller, without admitting or denying the CFTC's allegations, consented to the entry of an order finding that he violated all sections of the CEA and CFTC regulations as charged in the complaint and directing him to cease and desist from further violations; ordering him to pay a $150,000 civil penalty; permanently prohibiting him from trading on the floor of any exchange; and revoking his registration with the CFTC.
Like Schiller, Chesrow also consented to the entry of an order without admitting or denying the CFTC's allegations. The order requires Chesrow to pay a $50,000 penalty, cease and desist from further violations, and, for a two year period running from the date of the order, not to apply for registration or seek exemption from registration with the Commission in any capacity, nor engage in any activities requiring registration or exemption from registration, except as provided in the Order. The order also prohibits Chesrow, for a period of two years, from trading on the floor of any exchange for his own account or for any account in which he has a direct or indirect interest on any contract market, although Chesrow is permitted to trade off the floor, including electronically, of any contract market for his own account, including as a member, if duly admitted.
Whealan previously settled with the CFTC on similar terms. (See CFTC News Release 4341-99, November 22, 1999.)
The following CFTC Division of Enforcement staff were responsible for the case: Scott R. Williamson, Rosemary Hollinger, Hugh J. Rooney, and Charlotte A. Ohlmiller, and, from the Division of Clearing and Intermediary Oversight, Steven R. Greska.
Rosemary Hollinger, Regional Counsel and Associate Director
CFTC Division of Enforcement
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