Release:#4002-97 (CFTC Docket #93-2)
For Release March 12, 1997
CFTC ACCEPTS SETTLEMENT OFFER FROM JOHN P. GANDOLFO
Settlement Agreement Revokes Gandolfo's Registration with the CFTC and
Orders Him to Pay a $100,000 Civil Penalty, Among Other Sanctions
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that it has issued an order accepting an offer of settlement from John P. Gandolfo, a floor broker on the Commodity Exchange Inc., in connection with a complaint filed by the CFTC on October 19, 1992. Gandolfo is registered with the CFTC as a floor broker.
The CFTC order finds that Gandolfo violated the Commodity Exchange Act (CEA) by cheating his customers in the handling of their orders. The CFTC order further finds that Gandolfo violated provisions of the CEA and the CFTC regulations prohibiting noncompetitive trading; fictitious sales; and causing the reporting of non-bona fide prices. The CFTC order finds that Gandolfo participated in noncompetitive trades with local traders to resolve errors he had made in handling customer orders such as by overfilling or underfilling an order. According to the CFTC order, he also traded indirectly opposite, or bucketed, his orders, and he also traded opposite the orders of a broker executing orders for the same floor brokerage firm. The CFTC order further finds that Gandolfo, on occasion, repaid the opposite traders for losses they had absorbed from accepting Gandolfo's errors by changing the execution price on customer trades to benefit the other traders.
Gandolfo, without admitting or denying the findings in the Commission's order, consented to the entry of a CFTC order:
Under the settlement, Gandolfo also agreed to cooperate with the Commission in any ongoing proceeding relating to this matter, and not to seek registration with the Commission in any capacity for one year.
CFTC Commissioner John E. Tull, Jr., dissented from the Commission's acceptance of the offer of settlement of Mr. Gandolfo.