#4294-99 (CFTC Docket No. SD 99-7)
For Release: July 29, 1999
CFTC FINDS THAT JAMES L. CONNELLY, A FLOOR BROKER AT THE CHICAGO MERCANTILE EXCHANGE, IS SUBJECT TO STATUTORY DISQUALIFICATION AND ISSUES CONSENT ORDER RESTRICTING CONNELLY'S REGISTRATION
WASHINGTON The Commodity Futures Trading Commission (CFTC) announced today that it filed a Notice of Intent to Suspend, Revoke or Restrict Registration (Notice) against James L. Connelly, of Chicago, Illinois, a registered floor broker trading on the Chicago Mercantile Exchange (CME), and simultaneously accepted Connelly's offer of settlement in which he agrees to a life-time dual trading ban.
The CFTC's Notice alleges that Connelly has been a member of the CME since 1983, and that, on at least eight instances between June 1992 and June 1993, Connelly took into his own trading account the purchase or sale of lumber futures contracts which he originally executed for a customer, and then indirectly bucketed his customer's order opposite another floor broker or floor trader to fill his customer's order and offset the position taken in his personal account. By such transactions, the Notice alleges, Connelly earned a profit for his personal trading account, while his customers received less advantageous fills of their orders than those to which they were entitled. The Notice also alleges that Connelly committed record-keeping violations in connection with those transactions.
The Notice further alleges that, based on these transactions, the CME charged Connelly in a disciplinary action, and as a result of that action, the CME required Connelly to make restitution to the affected customers in the total amount of $7,952, fined him $25,000, suspended his floor access privileges for six months, and ordered Connelly, among other things, to abide by a lifetime dual trading restriction at the CME. Finally, the CFTC's Notice alleges that the serious violations alleged in the Notice constitute a cause for the statutory disqualification of Connelly from registration under Section 8a(3)(M) of the Commodity Exchange Act (CEA), which provides a basis for conditioning, suspending, revoking or restricting Connelly's registration under Section 8a(4) of the CEA.
Without admitting or denying the allegations contained in the Notice, Connelly consented to the entry of a Commission Order which restricts his registration by preventing him from ever trading on behalf of a customer and for himself at the same time on any U.S. futures exchange.