Release: 4790-03 (CFTC Docket No 02-09)
For Release: May 29, 2003
CFTC SUSPENDS NYBOT FLOOR BROKER FOR UNLAWFULLY TRADING COFFEE FUTURES CONTRACTS
In Settling Charges Against Trader Brian Thornton, CFTC Finds That Thornton Engaged in Fraud, Bucketing of Customer Orders, Reporting Non-Bona Fide Prices, Noncompetitive Trading, Wash Sales, and Accommodation Trades
WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today that it has accepted an offer of settlement submitted by, and issued an order against, Brian Thornton (Thornton) of Long Beach, New York, who is registered with the CFTC as a floor broker. The order, which arises out of an administrative proceeding brought against Thornton and others in March 2002 (see CFTC News Release 4621-02, March 20, 2002), finds that on certain days between February and November 2000, Thornton unlawfully executed coffee futures trades on the Coffee, Sugar & Cocoa Exchange (CSCE), a subsidiary of the New York Board of Trade.
Specifically, the CFTC order finds that Thornton fraudulently executed trades in the coffee futures ring of the CSCE by indirectly bucketing his customer orders by non-competitively trading for his own account indirectly opposite his customer orders, and that, by engaging in noncompetitive trading, Thornton also reported prices on his trading cards, to his customers and to the CSCE, that were not bona fide. The order also finds that Thornton traded non-competitively and entered into illegal wash sales and accommodation trades by assisting other brokers in taking the opposite side of their customers’ orders. Finally, the order finds that Thornton failed to record required trading information on his trading cards.
The order requires Thornton to cease and desist from further violations of certain provisions of the Commodity Exchange Act and CFTC regulations, and to pay a civil penalty in the amount of $25,000. The order further requires Thornton’s registration as a floor broker to be suspended for a period of three months, and that Thornton be prohibited from executing customer trades for a period of three years after his suspension is completed. Finally, the order demands that Thornton’s floor broker activities following his suspension be subject to conditions, including obtaining a qualified sponsor. Thornton consented to the issuance of the order without admitting or denying the order’s findings or the allegations contained in the underlying complaint.
Respondents Joseph Defrancesco, Marc Greenstein, and Ronald Kilbride previously settled with the CFTC on similar terms. (See CFTC News Releases 4676-02, July 23, 2002, and 4749, February 4, 2003.)
The following Division of Enforcement staff are responsible for the case: Richard Wagner, Paul Hayeck, John Dunfee, Jason Gizzarelli, and Margaret Kanyan.
Richard Wagner, Deputy Director
CFTC Division of Enforcement
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