Release: 4881-04 (CFTC Docket No. 03-25)
COMMODITY FUTURES TRADING COMMISSION FINES FLOOR BROKER FOR UNLAWFULLY
TRADING CRUDE OIL FUTURES CONTRACTS
WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today that it issued an order against Robert Benjamin Harmon, Jr. of Cos Cob, Connecticut, who is registered with the CFTC as a floor broker. The order finds that on certain days in July 2000, Harmon and another floor broker unlawfully executed crude oil futures trades on the New York Mercantile Exchange (NYMEX).
Specifically, the CFTC order, entered on January 16, 2004, finds that in July 2000, Harmon, trading for his own account, executed a series of trades opposite another floor broker. The order also finds that through those trades, 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.
Furthermore, according to the order, Harmon and the floor broker entered into those trades with the intent to avoid taking bona fide positions in the market, and such trading constitutes wash sales in violation of the Commodity Exchange Act (CEA) and CFTC regulations. The order also finds that by entering into such illegal, non-competitively executed trades, Harmon and the floor broker reported, or caused to be reported, prices that were not true and bona fide, in further violation of the CEA. The order states that Harmon 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.
Harmon, without admitting or denying the order’s findings, consented to the entry of the order, which requires him to cease and desist from further violations of certain provisions of the CEA and CFTC regulations, and to pay a civil penalty in the amount of $8,500.
The settlement arises from a complaint filed against Harmon on September 8, 2003 (see CFTC News Release 4837-03, September 9, 2003) at which time the CFTC also accepted a settlement offer and issued an order imposing a civil penalty of $7,500 from Michael Alan Garber for similar misconduct.
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: Lawrence M. Green, William Hoar, Karen Kenmotsu, and Gretchen L. Lowe.
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