UNITED STATES OF AMERICA
Before the
COMMODITY FUTURES TRADING COMMISSION
| ______________________________________________ | ||
| ) | ||
| In the Matter of: | ) | CFTC Docket No. 00-33 |
| ) | ||
| �� MARTIN K. ROGERS | ) | ORDER INSTITUTING PROCEEDINGS |
| �� 6308 West 93rd Street | ) | PURSUANT TO SECTIONS 6(c), 6(d) AND |
| �� Oak Lawn, Illinois 60453, | ) | 8a(4) OF THE COMMODITY EXCHANGE |
| �� | ) | ACT AND FINDINGS AND ORDER |
|
Respondent. |
) | IMPOSING REMEDIAL SANCTIONS |
| ______________________________________________ | ) |
I.
The Commodity Futures Trading Commission ("Commission") has reason to believe that Martin K. Rogers ("Respondent" or "Rogers") has violated Section 6(c) of the Commodity Exchange Act, as amended ("Act"), 7 U.S.C. � 9 (1994). Therefore, the Commission deems it appropriate and in the public interest that a public administrative proceeding be, and hereby is, instituted to determine whether Rogers engaged in the violation as set forth herein and to determine whether any order should be issued imposing remedial sanctions.
II.
In anticipation of the institution of this administrative proceeding, Rogers has submitted an Offer of Settlement ("Offer") that the Commission has determined to accept. Without admitting or denying the findings of fact and conclusions of law herein, Rogers acknowledges service of this Order Instituting Proceedings Pursuant to Sections 6(c), 6(d) and 8a(4) of the Commodity Exchange Act and Findings and Order Imposing Remedial Sanctions ("Order"). Rogers consents to the use of the findings herein in this proceeding and in any other proceeding brought by the Commission or to which the Commission is a party.1
III.
The Commission finds that:
A. SUMMARY
This case involves a violation of a Commission Order by Martin K. Rogers. Specifically, Rogers, who was granted conditional registration as a floor broker by a National Futures Association Final Order Granting Conditional Registration ("NFA Order"), dated November 23, 1998, was required to have his trading activities subject to review by a sponsor for a period of two years from the date of the NFA Order. After Rogers' sponsor withdrew his sponsorship in June 1999, Rogers traded without a sponsor for approximately eight months, thus violating the terms of the NFA Order, which pursuant to Section 17(o)(2) of the Act, is considered to be a Commission order.
B. RESPONDENT
Respondent Martin K. Rogers is 25 years old and resides at 6308 West 93rd Street, Oak Lawn, Illinois 60453. He was granted conditional registration as a floor broker pursuant to a NFA Order dated November 23, 1998.
C. FACTS
In March 1998, Rogers submitted an application to NFA for registration as a floor broker.
On July 22, 1998, NFA issued a Notice of Intent to Deny Registration ("Notice of Intent") to Rogers. The Notice of Intent alleged that in 1995, Rogers pled guilty to the felony offense of possession of a controlled substance.
On August 13, 1998, Rogers filed a response to the Notice of Intent. In his Response, Rogers submitted evidence to support his request for conditional registration as a floor broker. On November 23, 1998, NFA's membership subcommittee issued an NFA Order granting conditional registration to Rogers for a period of two years.
Pursuant to the terms of the NFA Order, Rogers was required to have his trading activities reviewed on a weekly basis by a sponsor. Initially, Rogers' sponsor was a registered floor broker for a registered futures commission merchant ("FCM") at the Chicago Mercantile Exchange ("CME"), where Rogers had been employed as a clerk since November 1996. After Rogers' first sponsor terminated his sponsorship, Rogers obtained a new sponsor, another registered floor broker. Rogers' second sponsor executed a Supplemental Sponsor Certification Statement ("SSCS") on April 16, 1999, which set forth specific responsibilities he agreed to undertake in his supervision of Rogers and whose terms were identical to those in the SSCS executed by his first sponsor.
On June 9, 1999, Rogers' second sponsor notified the NFA that he was terminating his sponsorship over Rogers because Rogers had stopped trading at the CME. Under the terms of the NFA Order and the SSCS, Rogers was required to stop acting as a floor broker or floor trader until he had obtained a qualified sponsor and his activities were once again subject to a new SSCS.
On June 11, 1999, Rogers applied for membership at the Chicago Board of Trade ("CBOT"). On July 14, 1999, the membership committee approved Rogers' membership at CBOT. From approximately August 1999 through April 3, 2000, Rogers traded at the CBOT without a sponsor, in violation of the NFA Final Order granting him conditional registration for a two year period, terminating on November 23, 2000.
D. VIOLATIONS OF THE ACT AND COMMISSION REGULATIONS
1. The NFA Order Is Considered A Commission Order.
Section 17(o)(2) of the Act, relating to registration functions the Commission may require of a futures association, states, in pertinent part:
Unless the Commission grants review under this section of an order concerning registration issued by a futures association, the order of the futures association shall be considered to be an order issued by the Commission.
The Commission did not grant review of the NFA Order, which was issued on November 23, 1998. Therefore, pursuant to Section 17(o)(2) of the Act, the NFA Order is "considered to be an order issued by the Commission."
2. By Failing to Comply with the Terms, Conditions and Obligations of the Commission Order, Rogers Violated Section 6(c) of the Act.
Section 6(c) of the Act prohibits, among other things, violations of any Commission order:
If the Commission has reason to believe that any person . . . is violating or has violated any of the provisions of this Act or of the rules, regulations, or orders of the Commission thereunder, it may serve upon such person a complaint stating its charges in that respect . . .
By trading at the CBOT from August 1999 through April 3, 2000, without benefit of a sponsor, Rogers violated a specific obligation of the Commission order, and therefore, violated Section 6(c) of the Act. See Lawrence v. CFTC, 759 F.2d 767, 771 (9th Cir. 1985) (Ninth Circuit affirmed the Commission's finding that Respondent's failure to pay a civil monetary penalty assessed by the Commission constituted a violation of a Commission order). See also In re Michno, [1990-1992 Transfer Binder] Comm. Fut. L. Rep. (CCH) � 25,040 at 37,891 (CFTC April 22, 1991) (Section 6(b) of the Act [now Section 6(c)] prohibits, among other things, violations of any Commission order).
IV.
Rogers has submitted an Offer of Settlement in which, without admitting or denying the findings herein, he: (1) acknowledges service of this Order; (2) admits the jurisdiction of the Commission with respect to the matters set forth herein; (3) waives the filing of a Complaint and Notice of Hearing, a hearing, all post-hearing procedures, judicial review by any court, any objection to the staff's participation in the Commission's consideration of the Offer, all claims which he may possess under the Equal Access to Justice Act, 5 U.S.C. � 504 (1994) and 28 U.S.C. � 2412 (1994), as amended by Pub. L. No. 104-121, �� 231-232, 110 Stat. 862-63, and part 148 of the Commission's Regulations, 17 C.F.R. �� 148.1, et seq. (2000), relating to, or arising from, this action and any claim of double jeopardy based upon the institution of this proceeding or the entry in this proceeding of any order imposing a civil monetary penalty or any other relief; (4) stipulates that the record basis on which this Order may be entered shall consist solely of the findings in this Order to which he has consented in the Offer; and (5) consents to the Commission's issuance of this Order, which makes findings and orders that: (a) Rogers cease and desist from violating Section 6(c) of the Act; (b) Rogers' trading privileges as a floor broker be suspended for thirty days; (c) after the thirty-day suspension is concluded, Rogers' registration as a floor broker be conditioned and restricted for a period of one year as described below in Section VI (3); and (d) Rogers comply with his undertaking set forth in the Offer not to take any action or make any statement denying, directly or indirectly, any statement in this Order or creating or tending to create the impression that the Order is without a factual basis.
V.
FINDING OF VIOLATIONS
Solely on the basis of Rogers' consent, as evidenced by the Offer, and prior to any adjudication on the merits, the Commission finds that Rogers violated Section 6(c) of the Act, 7 U.S.C � 9 (1994).
VI.
ORDER
Accordingly, IT IS HEREBY ORDERED THAT:
1. Rogers shall cease and desist from violating Section 6( c) of the Act;
2. Rogers' registration as a floor broker is suspended for thirty days;
3. After the thirty-day suspension is concluded, Rogers' registration as a floor broker is conditioned and restricted for a period of one year as follows:
(a) Rogers may not act as a floor broker or floor trader pursuant to Section 4e of the Act, and as defined under Regulation 1.3(n), 17 C.F.R. � 1.3(n) (1999), unless his activities are subject to a Supplemental Sponsor Certification Statement ("SSCS"), in the form attached hereto, executed and submitted to the Commission by a registered employing floor broker or if Rogers is not so employed, by a registered floor broker ("Sponsor"). Rogers must ensure that at all times during his conditional registration, he is being sponsored by a registered employing floor broker or if Rogers is not so employed, by a registered floor broker. Immediately upon the Sponsor's ceasing to serve as Rogers' sponsor, Rogers shall stop acting as a floor broker or as a floor trader until his activities are once again subject to a SSCS in the form attached hereto, executed and submitted to the Commission by a qualified sponsor;
(b) Sponsor shall review at least on a weekly basis, and monitor generally, all Rogers' trading records. The Sponsor shall maintain a written record of these weekly evaluations, indicating the date of each evaluation, and immediately confer with Rogers if Sponsor has any questions or concerns;
(c) Sponsor shall maintain a separate file of all correspondence and memoranda of telephone calls concerning problems, complaints, disputes or claims arising from or related to Rogers' handling of any customer trades;
(d) Sponsor shall discuss monthly with Rogers in person any questions, problems, complaints, disputes or claims of which the Sponsor is aware arising from or related to Rogers' handling of any customer trades. Sponsor shall maintain a written record of these conferences with Rogers;
(e) The Sponsor shall make all the letters and records that Sponsor maintains pursuant to paragraphs (b) through (d) above available to inspection by the Commission and the NFA;
(f) Sponsor shall promptly investigate and bring to Rogers' attention any act or failure to act by Rogers which may violate the Act, Commission regulations, the rules or requirements of NFA or any other self regulatory organization ("SRO") or the requirements or the Order;
(g) Sponsor will fully cooperate with any investigation or inquiry relating to Rogers conducted by the Commission, NFA or any other SRO;
(h) Rogers shall not directly or indirectly exercise supervisory authority over any person registered or required to be registered with the Commission, NFA or any other SRO;
(i) Rogers shall not serve on any disciplinary committee, arbitration panel, oversight panel or governing board of NFA or any other SRO subject to regulation by the Commission for such period as his registration is conditioned;
(j) Rogers shall not directly or indirectly act as a principal, partner, officer, director or branch office manager of any entity registered or required to be registered with the Commission;
(k) The SSCS will become part of Rogers' registration file, and shall be a public document and may be made available to any SRO and state and federal governmental entities;
(l) Rogers shall send written notification to the Membership Department of all exchanges where he has floor trading privileges that his registration is subject to conditions. Such written notification shall include providing the exchange with a copy of the Order and SSCS;
(m) Rogers shall not violate any provision of the Act, Commission regulations, the Order and the SSCS, or any exchange bylaws, rules, regulations or requirements;
(n) If the Commission, NFA or any other SRO, or a law enforcement agency or regulatory agency institutes a proceeding charging Rogers with violation of the Act, Commission regulations, the rules or requirements of NFA or any other SRO, the terms of the Order or a disciplinary offense as defined in Commission Regulation 1.63(a)(6), Rogers shall notify Sponsor, and Rogers and Sponsor shall immediately notify the Commission and NFA in writing of such action;
(o) Rogers' registration shall be automatically suspended if he is charged with any violation of the Act, Commission regulations, the rules or requirements of the NFA or any other SRO, the terms of the Order or a disciplinary offense as defined in Commission Regulation 1.63(a)(6), except that, as to offenses defined in Regulation 1.63(a)(6)(i)(C), suspension shall occur if fines aggregating $5,000 or more are imposed during the period of these conditions rather than during a calendar year;
(p) If Rogers' registration is automatically suspended pursuant to the preceding subparagraph, the period of suspension shall terminate six months after the date of the suspension, unless the Commission files within that period a Notice of Intent to Revoke or Restrict Registration, pursuant to Commission Regulation 3.60(a);
(q) Within five days after Sponsor notifies Rogers in writing that he is terminating his sponsorship of Rogers for any reason, Rogers and Sponsor will each file with the Director of the Commission's Division of Trading and Markets, the NFA and the Membership Department of the exchange where Rogers has floor trading privileges, a written notice of such termination. Such written notice shall fully set out the reasons that caused Sponsor to terminate the supervision;
(r) Rogers acknowledges that failure to comply with the Order shall constitute a violation of the Order and may subject him to administrative or injunctive proceedings, pursuant to the Act; and
(s) The conditions set forth in this paragraph VI.(3) shall remain in effect until one year and thirty days after the date of the Order, regardless of whether Rogers fills orders for customers or trades solely for his own account.
4. Rogers is directed to comply with his undertaking that neither he nor any of his agents or employees under his authority or control shall take any action or make any public statement denying, directly or indirectly, any findings or conclusions in the Order, or creating or tending to create, the impression that the Order is without a factual basis; provided, however, that nothing in this provision shall affect Rogers': (a) testimonial obligations; or (b) right to take legal positions in other proceedings to which the Commission is not a party.
Unless otherwise specified, the provisions of this Order shall be effective on this date. A copy of this Order shall be served on Rogers at the address set forth in the caption of this Order, on all contract markets, and on the National Futures Association.
| By the Commission. | ||
| Dated: September 25, 2000 | ______________________ | |
| Jean A. Webb | ||
| Secretary to the Commission | ||
|
Commodity Futures Trading Commission |
NOTES:
1 Respondent does not consent to the use of the Offer or this Order as the sole basis for any other proceeding brought by the Commission other than a proceeding to enforce the terms of this Order, nor does Respondent consent to the use of the Offer, or the findings in the Order consented to in the Offer, by any other person or entity in this or any other proceeding. The findings made in the Order are not binding on any other person or entity named as a defendant or respondent in any other proceeding.