Release: #4242-99 (CFTC Docket No.99-8)
For Release: March 5, 1999
CFTC FILES ADMINISTRATIVE COMPLAINT AGAINST SELWYN "SY" GAIBER OF INDIAN WELLS, CALIFORNIA, CHARGING VIOLATIONS OF THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS
WASHINGTON – The Commodity Futures Trading Commission (CFTC) filed a two-count administrative complaint charging Selwyn "Sy" Gaiber of Indian Wells, California, with violating section 4m(1) of the Commodity Exchange Act (CEA) by failing to register as a commodity trading advisor (CTA), as well as certain CFTC regulations.
According to the complaint, filed on March 4, 1999, Gaiber co-founded and operated a private investment club called the Bulls and Bears Club. The complaint alleges that between January 1997 and December 1997, Gaiber acted as an unregistered CTA by giving commodity trading advice to members of the Bulls & Bears Club. The complaint further alleges that Gaiber provided that advice for compensation in weekly investment seminars by recommending trades to club members, either individually or in small groups, and pursuant to discretionary trading authority over seven of the members' commodity trading accounts, and by acting as the commodity trading advisor for the account of a commodity pool formed by some of the members.
In addition, the complaint charges that Gaiber violated CFTC regulations 4.31, 4.34 and 4.35 by entering into agreements with prospective clients to direct such clients' commodity interest accounts, without delivering to them any documents disclosing the risks associated with managed commodity accounts or the record of his performance in directing the trading of commodity accounts.
A public hearing has been ordered to determine if the charges in the complaint are true, and, if so, what sanctions, if any, are appropriate and in the public interest. Possible sanctions include an order directing Gaiber to cease and desist from violating the CEA and CFTC regulations, prohibiting Gaiber from trading on or subject to the rules of any contract market and prohibiting all contract markets from granting Gaiber trading privileges thereon, ordering Gaiber to make restitution of damages caused by violations of the CEA, and imposing civil monetary penalties of not more than the higher of $110,000 or triple the monetary gain for each violation.
# # #