Release:#3917-96

For Release:June 11, 1996

NEW YORK FEDERAL COURT REFUSES TO ENJOIN CFTC INVESTIGATION IN RESPONSE TO A MOTION FILED BY AVCO FINANCIAL CORPORATION

WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that on June 5, 1996, the Honorable John G. Koeltl, District Court Judge of the U.S. District Court for the Southern District of New York, issued an opinion and order denying the motion of AVCO Financial Corp. (AVCO), of Greenwich, Connecticut, to preliminarily enjoin a CFTC investigation. AVCO is a software developer and publisher that markets and sells a trade-signalling computer program under the name "Recurrence" that charts data in the Swiss Franc futures market and assists customers in analyzing that market, according to the opinion.

In denying AVCO's motion for a preliminary injunction, the court observed that the CFTC is conducting an investigation of AVCO under a properly authorized CFTC formal order of investigation issued on January 23, 1996. The court found that there was no credible showing that the CFTC harassed or abused AVCO or acted in a manner outside its authority or in contravention of law, as alleged by AVCO.

Judge Koeltl, in his opinion and order, states: "This is not a case where enforcement proceedings have been brought against AVCO, and none may ever be brought. Nor is this a proceeding to enforce an investigatory subpoena. Rather, this is a preemptive attempt by AVCO to challenge the investigative authority of the Commission at a relatively early phase before the Commission has been allowed to investigate all the facts relating to AVCO."

AVCO filed its complaint and motion seeking preliminary and permanent injunctive relief on April 19, 1996. According to its complaint and motion AVCO attempted to halt the CFTC from proceeding with its investigation, including seeking to enjoin the CFTC from seeking certain discovery from AVCO and its officers and from contacting AVCO's customers or potential customers.

AVCO's complaint ultimately seeks declaratory relief in the nature of a judicial determination that it is not a commodity trading advisor as defined in the Commodity Exchange Act, and, therefore, allegedly beyond the enforcement jurisdiction of the CFTC.

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