Release: 4779-03
For Release: April 29, 2003

S&P TRADER BRIAN RAY CHARGED WITH FRAUD

WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today the filing of a two-count administrative complaint against Brian Ray (Ray), a registered floor broker, of Bannockburn, Illinois, charging him with cheating and defrauding customers whose S&P 500 commodity futures orders he filled, and with violating a prior Commission order that had restricted his registration and prohibited him from engaging in any personal trading while his registration was restricted.

Trader Had A Disciplinary History of Customer Fraud

The complaint, filed on April 21, 2003, alleges that in December 1997, a disciplinary committee of the Chicago Mercantile Exchange (CME) found that on eight occasions during 1996, Ray had taken trades into his error account that he had executed on behalf of customers. In those instances, Ray had returned the customer orders as unable to be filled. The CME suspended Ray’s membership privileges for six months, fined him $500,000, and ordered him to pay $61,175 in restitution to the affected customers. In May 1999, the National Futures Association (NFA) entered an order restricting Brian Ray’s registration and prohibited him from trading for his personal account. According to the CFTC complaint, when Ray returned to the trading floor and resumed filling customer orders, Ray nevertheless traded for his personal account in violation of the NFA order. The CFTC complaint also charges that Ray cheated and defrauded the customers whose orders he filled.

A public hearing has been ordered to determine whether the CFTC’s allegations are true and, if so, what sanctions are appropriate. Possible sanctions include civil penalties, a cease and desist order, a trading prohibition, repayment of losses to defrauded customers, and registration sanctions. No hearing date has been set.

A copy of the CFTC complaint may be found at http://www.cftc.gov/.

The following Division staff are responsible for the case: Rosemary Hollinger, Thomas Koprowski, William Heitner, Jennifer Diamond, and Scott Williamson.

Media Case Contact:
Rosemary Hollinger
Associate Director/Chicago Regional Counsel
CFTC Division of Enforcement, (312) 596-0520

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