For Release: June 3, 2003
CFTC ACCEPTS OFFER OF SETTLEMENT AGAINST CHICAGO FUTURES FIRM AND ITS PRESIDENT
CFTC Orders Robbins Futures, Inc. and Joel Robbins to Pay Civil Penalty of $120,000 and to Cease and Desist from Future Violations
WASHINGTON, D.C. -The U.S. Commodity Futures Trading Commission (CFTC) announced today that it had issued an order accepting an offer of settlement from a Chicago futures firm and its president to settle charges that they had failed to supervise the firm’s handling of customer accounts.
The CFTC ordered Robbins Futures, Inc., a registered futures commission merchant, located in Chicago, Illinois, and its President, Joel Robbins, of Riverwoods, Illinois, to pay a civil monetary penalty of $120,000 and to cease and desist from future violations.
The settlement announced by the CFTC resolves charges brought against the respondents in a December 30, 2002, enforcement action, In the Matter of Robbins Futures, Inc. and Joel Robbins (CFTC Docket No. 03-05) (See CFTC News Release 4731-02, December 30, 2002), that they failed to supervise their employees’ handling of commodity interest accounts at the firm including accounts that were used as part of a multi-million dollar commodity pool fraud prosecuted by the CFTC in CFTC v. Andrew Duncan and The Aurum Society, Inc., No. 01 C 6802 (N.D. Ill. Aug. 30, 2001) (See CFTC News Release 4565-01, September 5, 2001).
According to the CFTC’s order, from January 1999 through August 2001, the respondents failed to supervise their employees’ handling of accounts owned or managed by an individual named Andrew Duncan, doing business as the Aurum Society, by failing to recognize or ignoring signs of Duncan’s illegal activities in these accounts.
Specifically, the firm failed to detect that the accounts were funded with deposits from individuals and entities other than the accountholder; there were nineteen instances in which a third party wire transferred funds to the Aurum accounts, according to the order. These wires totaled nearly $2 million, according to the order. During this same period, there were fifteen instances in which a third party wire transferred funds to one of the accounts managed by Duncan, and these wires totaled approximately $430,000, according to the order. The firm failed to detect this activity because its procedures for identifying the source of funds in wire transfers for customer accounts were inadequate, according to the order. In addition, on four occasions, the firm received one or more cashier’s checks or postal orders for deposit into the Aurum accounts from an individual who was not the accountholder, according to the order. These checks indicated pooled funds, but the firm failed to detect the activity because its procedures for handling cashier’s checks and postal orders were inadequate, according to the order.
According to the CFTC’s order, the firm also failed to detect a suspicious pattern of large deposits followed by a prompt withdrawal of funds by Duncan. On at least three different occasions a large deposit into the Aurum accounts was followed by a withdrawal of funds to an offshore account within a matter of days; the firm failed to respond to the activity, according to the order.
The firm also received a series of suspicious telephone inquiries about Duncan and his activities from three individuals, and the firm failed to respond appropriately to the information, according to the order.
In addition to the failure to supervise, the CFTC’s order states that Robbins directly or indirectly controlled Robbins Futures and did not act in good faith or knowingly induced Robbins Futures’ violations.
The following Division of Enforcement staff are responsible for the case: David Terrell, Elizabeth Streit, William Heitner, and Rosemary Hollinger.
Media Enforcement Case Contact
Associate Director/Chicago Regional Counsel
CFTC Division of Enforcement (312) 596-0520
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