November 26, 2014

CFTC Orders Fine and Revokes Registration of Former COMEX Floor Broker Dominick Anthony Cognata Based on His Failure to Produce Required Records and His Pattern of Conduct Demonstrating an Inability to Comply with the Commodity Laws

Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today announced that it has ordered Dominick Anthony Cognata, who was a registered COMEX floor broker, to pay a $140,000 civil monetary penalty for failing to comply with a CFTC subpoena and to cease and desist from further violations of CFTC recordkeeping requirements. The CFTC also announced that it has separately revoked the registration of Cognata for his demonstrated inability to abide by rules and regulations associated with him and his floor broker registration, including CFTC recordkeeping requirements.

The CFTC’s announcements finalize two Initial Decisions and Orders issued by Chief Administrative Law Judge (ALJ) Walter J. Brudzinski on October 22, 2014, in administrative proceedings filed against Cognata in September 2013 (see Press Release, Complaint, and Notice 6724-13, September 30, 2013).

In one proceeding, the CFTC’s Complaint charged Cognata with failing to produce, or otherwise make available, to the CFTC certain records relating to his brokerage activities, in response to a CFTC subpoena, in violation of Section 4g of the Commodity Exchange Act (CEA) and CFTC Regulations 1.31(a) and 1.35(a). In the other proceeding, the CFTC’s Notice of Intent to Revoke (Notice) sought to revoke Cognata’s registration as a floor broker, under Sections 8a(3)(M) and 8a(4) of the CEA based on his settlement of two prior Exchange disciplinary actions and his violations of CFTC recordkeeping requirements.

In the Initial Decision and Order (CFTC Docket No.13-41) ruling on the CFTC’s Complaint, the ALJ found that, by failing to file an answer or other responsive pleading to the CFTC’s Complaint, Cognata was in default and that his failure to comply with the CFTC’s subpoena constituted a violation of recordkeeping requirements in the CEA and CFTC Regulations. The ALJ found that, because the subpoena requested documents, including trading cards and order tickets, that were required to be kept and maintained as part of a valid regulatory scheme, the Fifth Amendment privilege against self-incrimination was not a defense to Cognata’s violations. The ALJ ordered Cognata to cease and desist from further violations of the CEA and CFTC Regulations as charged in the Complaint, and ordered Cognata to pay a civil monetary penalty of $140,000.

In the Initial Decision and Order (CFTC Docket No.SD 13-06) ruling on the CFTC’s Notice, the ALJ found that Cognata was in default for failing timely to file a responsive pleading to the CFTC’s Notice and ordered that Cognata’s registration be revoked for “other good cause,” pursuant to Sections 8a(3)(M) and 8a(4) of the CEA, based on Cognata’s settlement of two prior Exchange disciplinary actions, which established a pattern of conduct demonstrating Cognata’s inability to abide by the rules and regulations for floor brokers, and based on Cognata’s failure to produce required records to the CFTC.

CFTC Division of Enforcement staff members responsible for this matter include K. Brent Tomer, R. Stephen Painter, Jr., Patrick Daly, Trevor Kokal, Elizabeth Brennan, Steven I. Ringer, Lenel Hickson, and Manal Sultan.

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Last Updated: November 26, 2014