For Release: July 3, 2003
CFTC FILES AND SETTLES CLAIMS AGAINST FLOOR BROKER
MICHAEL H. VARNER
CFTC Orders Varner to Pay Civil Penalty and Prohibits Him from Trading for Customers for Five Years
WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) today announced the acceptance of an offer of settlement from Michael H. Varner, a former New York Board of Trade (NYBOT) floor broker, to settle a charge that he violated section 6(c) of the Commodity Exchange Act (CEA) by violating a Commission order issued on June 4, 1999.
The settlement announced by the CFTC resolves the charge brought against the respondent in a June 1, 2001, enforcement action, In the Matter of Michael H. Varner (CFTC Docket No. 01-08), that Varner violated the Commission order dated June 4, 1999 (see CFTC News Release 4522-01, June 4, 2001). The Commission’s June 1999 order was issued in settlement of a statutory disqualification proceeding brought against Varner in 1999, In re Michael Varner, [1998-1999 Transfer Binder] Comm. Fut. L. Rep. (CCH) (CFTC Jan. 27, 1999).
According to the CFTC’s order, the Commission’s June 1999 order imposed certain restrictions on Varner’ floor broker registration for two years from the date thereof. Within the two-year period, however, Varner violated the restrictions set forth in the Commission’s June 1999 order, and in so doing, Varner violated section 6(c) of the CEA.
Specifically, the Commission’s June 1999 order prohibited Varner from: (1) trading on behalf of customers; (2) clearing his trades through any futures commission merchant (FCM) other than the FCM specified in the June 1999 order; and (3) acting as a principal, partner, officer, or branch office manager of any entity registered or required to be registered with the Commission. The Commission’s order finds that Varner violated the terms of the Commission’s June 1999 order in that, during the restricted period, he: (1) traded on behalf of Delta Capital Fund (Delta Capital), a limited partnership in which he and four other persons were participants; (2) cleared his trades for Delta Capital through an FCM not designated in the June 1999 order; and (3) acted as the president and principal of Hunter Trading, an entity which, throughout the restricted period, was registered as a commodity trading advisor. According to the order, in violating the Commission’s June 1999 order, Varner violated section 6(c) of the CEA.
Varner was ordered by the Commission to pay a civil penalty of $50,000. In addition, the Commission’s order prohibits Varner from applying for registration for five years, and requires him to cease and desist from violating section 6(c) of the CEA.
The following Division of Enforcement staff were responsible for the case: Linda Y. Peng, Beth Morgenstern, Lenel Hickson, Jr., Stephen Obie, and Vince McGonagle.
Media Enforcement Case Contact
Associate Director/New York Regional Counsel
CFTC Division of Enforcement
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