Before the




Paul S. McKnight has appealed from a decision of the National Futures Association ("NFA") imposing a $5,000 money penalty in light of McKnight's failure to conform his conduct to high standards of commercial honor and just and equitable principles of trade.1 He has also filed a petition for a stay of his obligation to pay the money penalty while the Commission considers his appeal. McKnight argued that NFA's disciplinary proceeding was flawed by a refusal to consider mitigating circumstances or alternative explanations and a failure to evaluate his intent in undertaking the challenged conduct. He contended that denial of the stay would lead to irreparable harm because he cannot pay the money penalty and his failure to pay will result in the loss of his livelihood. Finally, he claimed that neither NFA nor the public interest would be harmed by the granting of his petition. NFA opposed the petition arguing that McKnight failed to meet the burden imposed on him by Commission Rule 177.22.

Under Commission Rule 171.22, the Commission evaluates petitions for a stay pending appeal in terms of four factors: (1) whether petitioner is likely to prevail on the merits; (2) whether petitioner will be irreparably harmed without a stay; (3) the effect that the issuance of a stay will have on the opposing party; and (4) the effect that either the issuance or denial of a stay will have on the public interest.

In this instance, petitioner's showing on both likelihood of success on the merits and irreparable harm are unpersuasive. His petition does not provide sufficient detail about the alleged errors by NFA to permit a reasoned assessment of the likelihood that Commission review will lead to a change in the result of NFA's decision. Moreover, McKnight failed to submit either an affidavit or other reliable evidence to support his claim that he is unable to pay the $5,000 fine that NFA imposed. Consequently, we cannot reliably infer that the failure to grant his petition will result in the loss of his livelihood. Absent such an inference, McKnight cannot establish that he is likely to suffer irreparable harm in the circumstances presented.2

Accordingly, McKnight's petition is denied.


By the Commission (Chairman RAINER and Commissioners HOLUM, SPEARS, NEWSOME and ERICKSON).

Jean A. Webb
Secretary of the Commission
Commodity Futures Trading Commission

Dated: November 1, 2000

1 After a hearing, NFA also found that McKnight had traded the accounts of several individuals on a discretionary basis even though such authority was not granted in writing.

2 The Commission has consistently held that payment of a money penalty that can be recovered if petitioner prevails on the merits does not support a finding of irreparable harm. In re Slusser, [1998-1999 Transfer Binder] Comm. Fut. L. Rep. (CCH) 27,743 (CFTC Aug. 19, 1999); Global Futures Holdings, Inc. v. NFA, [1998-1999 Transfer Binder] Comm. Fut. L. Rep. (CCH) 27,467 (CFTC Nov. 24, 1998).