Release: #4216-98 (CFTC Docket No. 95-5)
For Release: December 21, 1998
CFTC ALJ'S INITIAL DECISION ON REMAND REVOKES REGISTRATION OF MICHAEL F. STARYK, ORDERS HIM TO PAY CIVIL PENALTY OF $1,327,500 AND IMPOSES PERMANENT TRADING BAN
WASHINGTON – The Commodity Futures Trading Commission (CFTC) announced that on December 4, 1998, the Honorable Bruce C. Levine, CFTC Administrative Law Judge (ALJ), entered anInitial Decision On Remand revoking the registration of Michael F. Staryk of Winter Haven, Florida, ordering him to cease and desist from violating the Commodity Exchange Act (CEA) and CFTC regulations, and further ordering him to pay a civil monetary penalty of $1,327,500, and imposing a permanent trading ban. (In the Matter of Michael F. Staryk, CFTC Docket No. 95-5).
In the Initial Decision on Remand, which followed a four-day hearing in Ft. Lauderdale, Florida, in July 1998, ALJ Levine found that Staryk intended to defraud his customers when he told them that energy options trading presented opportunities for substantial and near-certain profits at very little risk, and also that he knew his message about the trading opportunities in heating oil and unleaded gas options was false.
The ALJ’s decision stems from a complaint filed by the CFTC on February 7, 1995, charging that Staryk engaged in violations of the anti-fraud provisions of the CEA and CFTC regulations. The complaint alleged that, from August 1991 to the time of the complaint’s filing, Staryk engaged in fraud by misrepresentation and omission of material facts in connection with the solicitation of commodity options transactions. (See CFTC News Release 3819-95, February 10, 1995.)
Previously, on June 5, 1996, ALJ Levine issued an Initial Decision on summary disposition finding that Staryk committed fraud in soliciting customers to trade in commodity options, imposing a civil monetary penalty, registration revocation, permanent trading ban, and a cease and desist order. (CFTC News Release 3915-96, June 11, 1996). Staryk appealed the Initial Decision, and on December 18, 1997, the Commission issued an Opinion and Order in which it affirmed in part and vacated in part the Initial Decision, and remanded the case for further proceedings. (See CFTC Opinions Update, #0004-97, December 19, 1997.)
In ALJ Levine's December 4, 1998, Initial Decision on Remand, the ALJ reduced his original civil monetary penalty assessment by 25 percent from $1.77 million to approximately $1.33 million based on the scope of Staryk’s violations, and reinstated the sanctions of a registration revocation, a permanent trading ban, and a cease and desist order. The ALJ held that customer restitution would be inappropriate in this case "given (1) the degree of complexity likely to be involved in establishing the claims of individual customers and (2) Staryk’s limited ability to repay to customers any damages he may have caused."
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