Release:#3968-96 (CFTC Docket 95-15)
For Release:November 25, 1996
CFTC ACCEPTS SETTLEMENT OF AMERICAN FUTURES GROUP AND THREE INDIVIDUALS CHARGED WITH FAILURE TO SUPERVISE
Respondents Order to Pay $450,000 in Customer Restitution
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today it has issued an order accepting an offer of settlement from American Futures Group, Inc. (AFG), a futures commission merchant (FCM) headquartered in New York; AFG chief executive officer George J. Perk, Jr. (of Bernardsville, New Jersey); AFG president Thomas G. Reeves (of New York, New York); and former manager of AFG's Aventura, Florida, branch office, Joseph J. Marchiano (of Boca Raton, Florida).
The CFTC order finds that the respondents failed to supervise diligently the manner in which their officers, employees and agents handled the commodity interest accounts carried by AFG in the Aventura branch, and all other activities of such persons relating to their business as Commission registrants. Specifically, AFG, Perk, and Reeves failed to design, implement, or monitor an appropriate supervision and compliance system in the Aventura branch.
The order finds that Marchiano failed to establish procedures to adequately train and supervise the account executives (AEs) in the Aventura, Florida branch. In addition, he failed to develop a system to monitor the solicitation of customer business and the trading activity of the AEs in the Aventura, Florida, branch and he failed to establish procedures to ensure that customer complaints would be fully investigated.
Under the Commission's order, AFG, Perk, and Reeves are ordered to pay $450,000 to be used for restitution to customers. Marchiano is ordered to withdraw his AP registration and not to re-apply for a period of one year. After the expiration of this one year time period, should he reapply for registration, Marchiano may not act as an AP unless he is supervised by a sponsor for a period of two years. Finally, Marchiano is ordered to pay a civil monetary penalty of $10,000.
The order settles a two-count CFTC administrative complaint which was filed on July 31, 1995.