CFTC News Release 4452-00 (CFTC Docket No. 99-17)
For Release September 27, 2000

CFTC ACCEPTS SETTLEMENT OFFER OF FORMER REFCO FLOOR BROKER LISA BUDICAK IN CONNECTION WITH ORDER-TAKING AND RECORDKEEPING VIOLATIONS

CFTC Orders Budicak to Pay A $20,000 Civil Monetary Penalty And Conditions Any Future Registration For the Next Four Years

WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today the issuance of an order on September 26, 2000, accepting the offer of settlement of Lisa Budicak, a formerly registered floor broker, of the Chicago area, to resolve a CFTC complaint filed against her on September 30, 1999 (see CFTC News Release 4317-99, September 30, 1999).

The CFTC order finds that from at least January 1994 to December 1995, while employed by Refco, Inc., a registered futures commission merchant, as a phone clerk at Refco�s treasury bond desk at the Chicago Board of Trade, Budicak committed order-taking and recordkeeping violations in connection with a trade allocation fraud carried out by a former Beverly Hills introducing broker, Capital Insight Brokerage Inc. (Capital Insight), and its owner and president, S. Jay Goldinger. Budicak neither admits nor denies the allegations of the complaint or the findings in the order.

Specifically, the CFTC order finds that from at least January 1994 to December 1995, Budicak, who was registered for most of the time as a floor broker, wrote orders placed by Goldinger for Refco customers without obtaining account identification from Goldinger at the time the orders were received. In addition, the order finds that she also filled in account identification on orders already executed without such account identification and changed the account identification on orders already executed. The order finds that as a Commission registrant and a member of a contract market, Budicak was responsible under the Commodity Exchange Act (CEA) and CFTC regulations for properly preparing customer order tickets, and that she knew that specific account identification was required to be recorded on an office order ticket immediately upon receipt of the order from the customer.

The order further finds that Goldinger allocated trades among his customers by providing Budicak and the other phone clerks with the account numbers for the trades that were executed without account identification or by asking Budicak and the other phone clerks to change the account identification on trades already assigned to a customer account.

The order finds that Budicak, as a Commission registrant, directly violated the section 4g of the CEA and CFTC regulation 1.35(a-1)(1), and that, as a result of Budicak�s conduct, Refco violated the recordkeeping requirements and thus, Budicak aided and abetted Refco�s violations of section 4g and CFTC regulation 1.35(a-1)(1) and 1.35(a-1)(2), pursuant to section 13(a) of the CEA.

Budicak to Pay $20,000 As A Civil Monetary Penalty

Budicak has consented to the entry of the CFTC order that makes findings that she violated, and aided and abetted the violations of, the CEA and CFTC regulation set forth above. The CFTC order also:

• requires her to pay a $20,000 civil monetary penalty;
• directs her to cease and desist from violating the provisions of CEA and regulation set forth above;
• provides that for four years from the date of the Order, if Budicak registers with the CFTC, her registration will be conditioned and her trading activity will be supervised and subject to weekly review; and
• prohibits her from certain futures- and options on futures-related activities for three years.

The CFTC Has Filed & Settled Related Actions Against Goldinger, Capital Insight, Refco, and Refco floor brokers Constantine Mitsopoulos, Margaret Dull, and Richard Marisie

On August 31, 2000, the CFTC issued an order accepting the settlement offer of Refco floor broker Constantine Mitsopoulos, who was named in the same complaint with Budicak. The CFTC order found that Mitsopoulos failed to supervise diligently the Refco phone clerks handling Goldinger�s orders and committed recordkeeping violations. Mitsopoulos was ordered to pay a $1,000,000 civil monetary penalty and to comply with his undertaking never again to apply for registration with the Commission (see CFTC News Release 4439-00, August 31, 2000). Mitsopoulos neither admitted nor denied the complaint's allegations or the order's findings.

On April 10, 2000, the CFTC issued an order accepting the settlement offers of Refco phone clerks Margaret Dull and Richard Marisie, who were named in the same complaint with Budicak. The CFTC order required Dull and Marisie to pay $15,000 each in civil monetary penalties and restricted their floor activities for a two-year period in connection with similar recordkeeping violations. (see CFTC News Release 4393-00, April 10, 2000). Dull and Marisie neither admitted nor denied the allegations of the complaint or the findings of the order.

On November 12, 1999, the federal district court for the Central District of Los Angeles entered a consent order of permanent injunction and other equitable relief against Goldinger and Capital Insight based on the fraudulent allocation scheme in a related action (see CFTC News Release 4335-99, November 8, 1999). On December 13, 1999, Goldinger pled guilty in federal district court to wire fraud in connection with the fraudulent allocation scheme.

On May 24, 1999, the CFTC filed and settled a related action against Refco, charging order-taking and recordkeeping violations and a failure to supervise in connection with the trade allocation scheme and requiring, among other things, payment of a $6 million civil monetary penalty and an internal review of Refco�s compliance policies and procedures (see CFTC News Release 4269-99, May 24, 1999). Refco neither admitted nor denied the findings of the order.

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