U.S. COMMODITY FUTURES TRADING COMMISSION SETTLES CHARGES AGAINST FIVE INDIVIDUALS FOR TAKING PART IN ARTIFICIAL TRADING SCHEME
CFTC Order Finds That Illinois Residents Daniel J. Collins, Thomas M. Gianos, Bernard Miraglia and John R. Wade, and Wisconsin Resident Edward M. Collins Participated in Illegal Transfer Trades During the 1980s
WASHINGTON, D.C. – The Commodity Futures Trading Commission (CFTC) announced today the issuance of an administrative consent order settling charges under the Commodity Exchange Act (CEA) that respondents Daniel J. Collins, Thomas M. Gianos, Bernard Miraglia, John R. Wade, and Edward M. Collins (respondents) participated in illegal transfer trades.
The order finds that during the late 1980s, a trader established commodity futures intermarket spread transfer trades, as well as made transfer trades based on outright futures positions he held, using various accounts held jointly with the respondents. According to the order, the profits realized in the respondents' joint accounts with the trader were transferred back to the trader's individual accounts either through accounting entries effected by a futures commission merchant, or through the deposit of checks drawn on the joint accounts, which were then endorsed by the appropriate joint account holder for the benefit of the trader. The order further finds that, similarly, losses realized in the joint accounts were reimbursed by transfers of funds from the trader's individual accounts to the respondents' joint accounts, through accounting entries effected by the futures commission merchant. The order finds that the resultant trades were fictitious and non-competitive trades under the CEA.
The order permanently prohibits all respondents except Gianos from trading on or subject to the rules of a contract market. Respondent Gianos is barred from trading for six months, after which he may trade for himself and his family only. All respondents were also required to cease and desist from further violations of the CEA and its regulations, and to comply with various undertakings, including an undertaking not to seek registration under the CEA. In consenting to the entry of the order, the respondents neither admitted nor denied the findings in the order.
Of the ten respondents initially sued, five others entered into settlements, and two ultimately were dismissed from the action.
The following CFTC staff were responsible for this matter: Charlotte Ohlmiller, William Janulis and Rosemary Hollinger.
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