Release: 4837-03 (CFTC Docket Nos. 03-24 & 03-25)
For Release: September 9, 2003
U.S. COMMODITY FUTURES TRADING COMMISSION FINES NYMEX FLOOR BROKER FOR UNLAWFULLY TRADING CRUDE OIL FUTURES CONTRACTS
Michael Garber Settles Charges that He Engaged in Wash Sales, Reported Non-Bona Fide Prices, and Executed Non-competitive Trades
WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today that it issued an order filing and simultaneously settling an administrative proceeding against Michael Alan Garber of Forrest Hills, New York, who is registered with the CFTC as a floor broker. The order finds that on certain days in July 2000, Garber and another floor broker unlawfully executed crude oil futures trades on the New York Mercantile Exchange (NYMEX).
Specifically, the CFTC order, filed on September 8, 2003, finds that in July 2000, Garber, trading for his own account, executed a series of trades opposite another floor broker on the NYMEX, through which they bought and sold crude oil futures contracts in the same quantities and contract months, and at the same prices, which, when averaged at the end of the day, netted neither a profit nor a loss to either of them. Garber and the floor broker entered into those trades with the intent to avoid taking bona fide positions in the market. Such trading constitutes wash sales in violation of the Commodity Exchange Act and CFTC regulations. According to the order, by entering into such illegal, non-competitively executed trades, Garber and the floor broker reported, or caused to be reported, prices that were not true and bona fide, in further violation of the Commodity Exchange Act. According to the CFTC order, Garber and the other floor broker engaged in the non-competitive trades in an effort to increase their pit card submission rate to meet NYMEX floor rules.
The order requires Garber 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 $7,500. Garber consented to the issuance of the order without admitting or denying the order’s findings.
CFTC Also Files Charges Against NYMEX Floor Broker Robert Benjamin Harmon, Jr.
The CFTC also announced today that it has filed an administrative action alleging similar misconduct against Robert Benjamin Harmon, Jr., of Cos Cob, Connecticut, who is registered with the CFTC as a floor broker.
A public hearing has been ordered to determine whether the allegations in the administrative complaint, filed on September 8, 2003, against Harmon are true and, if so, what sanctions are appropriate. Possible sanctions include: 1) a cease and desist order; 2) trading prohibitions; 3) suspension or revocation of registration; and 4) civil monetary penalties of up to $110,000 for each violation of the Commodity Exchange Act and CFTC regulations, or triple the monetary gain to Harmon, whichever is greater.
A copy of the CFTC order and complaint may be found at http://www.cftc.gov.
The following Division of Enforcement staff members are responsible for the
case: Gretchen L. Lowe, Karen Kenmotsu, Lawrence M. Green, and William
Gretchen L. Lowe, Associate Director
CFTC Division of Enforcement
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