Release: #4088-97 (CFTC Docket #98-2)
For Release: December 18, 1997
CFTC FILES ADMINISTRATIVE COMPLAINT AGAINST REIFLER TRADING CORP., LIBERTY FUTURES, INC., AND THREE INDIVIDUALS ALLEGING UNREGISTERED "CORRESPONDENT" RELATIONSHIPS, AMONG OTHER VIOLATIONS OF FEDERAL COMMODITY LAW AND CFTC REGULATIONS
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) today announced the filing of a four-count administrative complaint on December 17, 1997, against Reifler Trading Corporation and its president and sole shareholder, Bradley C. Reifler, both of New York, New York; Liberty Futures, Inc., and its President Hany Labib, both of Burbank, California; and an unregistered individual Syed Hussain of Canoga Park, California. Reifler Trading is registered with the Commission as an Introducing Broker (IB). Liberty Futures (known as Noble Wealth Investments, Ltd. until August 25, 1994) has been registered as an IB since September 23, 1993. Both Bradley Reifler and Hany Labib are currently registered with the Commission as Associated Persons (APs).
The CFTC complaint alleges that from October 1993 to December 1994, Liberty operated as a de facto branch office of Reifler Trading through a "Correspondent Agreement" entered into by Reifler and Labib, even though Liberty was never listed as a branch office by Reifler Trading. The complaint alleges that since Labib and Hussain solicited accounts on behalf of Reifler Trading -- accounts that were introduced to Futures Commission Merchants (FCMs) with whom Reifler Trading had a clearing agreement -- Reifler Trading was required to ensure that Labib and Hussain were registered as Reifler Trading APs. However, according to the complaint, Reifler Trading failed to do so. Moreover, the complaint alleges that Reifler Trading, Bradley Reifler, and Liberty Futures failed to ensure that Liberty held itself out to the public as a branch office of Reifler Trading.
Furthermore, during the October 1993 to December 1994 time period, the CFTC alleges that Liberty Futures employed unregistered individuals to solicit accounts on their behalf, failed to open accounts with a carrying FCM, accepted checks from customers made payable to FCMs without the permission of those FCMs, and engaged in recordkeeping violations. The complaint alleges that Liberty Futures and Labib are liable for these violations, and that Reifler Trading is liable derivatively for these violations as a principal of Liberty Futures. Finally, the CFTC alleges that Reifler Trading failed to supervise diligently both Liberty Futures and Labib.
A public hearing will be held to determine whether the allegations against the respondents are true and, if so, to determine what sanctions, if any, should be imposed. Possible CFTC sanctions include cease and desist orders prohibiting the respondents from violating provisions of federal commodity law and CFTC regulations charged, revocations or suspensions of respondents' registrations, trading prohibitions, and civil monetary penalties of up to $100,000 for each violation of the CEA and CFTC regulations.