Release: 4305-99 (CFTC Docket No. 93-2)

For Release: August 23, 1999


Settlement Agreement Revokes Singer’s Registration, Prohibits Him From Trading For Five Years, and Imposes a $75,000 Civil Monetary Penalty, Among Other Sanctions

WASHINGTON--The Commodity Futures Trading Commission (CFTC) announced today the issuance of an order accepting an offer of settlement from Michael Singer, a floor trader on the New York Board of Trade, in connection with a complaint alleging trade practice fraud filed by the CFTC on October 19, 1992 (See CFTC News Release #3574-92, October 19, 1992).

The CFTC order, filed on August 23, 1999, finds that Singer, a registered floor broker, violated the Commodity Exchange Act (CEA) by cheating and defrauding his customers in the handling of their orders while trading on the Coffee, Sugar & Cocoa Exchange. The CFTC order further finds that Singer violated provisions of the CEA and the CFTC's regulations prohibiting noncompetitive trading; bucketing of customer orders, price changes, fictitious sales, wash sales and accommodation trades; and causing the reporting of non-bona fide prices.

According to the CFTC's order, Singer noncompetitively executed trades with other brokers and local traders to enable Singer to bucket his own customer orders; illegally took the opposite side of his customers' orders; illicitly offset two customer orders opposite the same floor trader at advantageous prices to that trader; benefited from changes to execution prices on customer orders while trading for himself; and aided and abetted another floor broker to indirectly bucket that broker's customers' orders.

Singer, without admitting or denying the findings, consented to the entry of the order:

>-- finding that Singer cheated and defrauded his customers (section 4b(a) of the CEA); engaged in noncompetitive trading and fictitious sales (section 4c(a)(A) of the CEA, and CFTC regulation 1.38(a)); and caused prices to be reported which were not true and bona fide (section 4c(a)(B) of the CEA);

>-- directing Singer to cease and desist from further violations;

>-- prohibiting Singer from trading for five years;

>-- revoking Singer's registration with the Commission; and

>-- assessing Singer a civil monetary penalty of $75,000.

Singer also agreed never to apply for registration or claim exemption from registration with the CFTC or to act in any capacity requiring registration or for which exemption from registration may be claimed.

The litigation continues as to the remaining respondents found liable by the CFTC's Administrative Law Judge in his Initial Decision issued on May 5, 1999, which is now on appeal to the Commission.

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