Release: 4874-04
For Release: January 7, 2004

COMMODITY FUTURES TRADING COMMISSION SUSPENDS FLOOR BROKERS FOR UNLAWFULLY TRADING COFFEE FUTURES CONTRACTS

WASHINGTON, D.C. -- The Commodity Futures Trading Commission (CFTC) announced today that it has issued a consent order (order) resulting in the trading suspensions of CFTC registered floor brokers Carmelo Contrino (Contrino), Robert Disarro (Disarro), William Overland (Overland), and Persio Paulino (Paulino). The order finds that on certain days between January 2000 and October 2000, the respondents unlawfully executed coffee futures trades on the Coffee, Sugar & Cocoa Exchange (CSCE), a subsidiary of the New York Board of Trade. The order arises out of a CFTC administrative proceeding brought in July 2002 against those brokers and others (see CFTC News Release 4667-02, July 9, 2002).

Specifically, the CFTC order finds that Contrino, Disarro, and Paulino fraudulently executed trades in the coffee futures ring of the CSCE by indirectly bucketing their customer orders, which specifically consisted of non-competitively trading for their own accounts indirectly opposite their customer orders. The order further finds that by engaging in noncompetitive trading, they also reported prices on their trading cards, to their customers, and to CSCE, that were not bona fide. The order also finds that Contrino and Paulino fraudulently executed customer orders by trading ahead of executable customer orders, and that Contrino, Disarro, Overland, and Paulino traded non-competitively and entered into illegal wash sales and accommodation trades by assisting other brokers in taking the opposite side of their customers orders. Finally, the order finds that Contrino failed to record required trading information on his trading cards.

Contrino, Disarro, Overland, and Paulino, without admitting or denying the allegations contained in the complaint or the findings contained in the order, consented to the issuance of the order, which finds that the parties violated provisions of the Commodity Exchange Act (Act) and its regulations, as follows:

• Contrino: sections 4b(a)(i-iv) (fraud), section 4c(a)(1) (wash sales and accommodation trading), section 4g (recordkeeping) and regulations 1.35 (recordkeeping), and 1.38 (non-competitive trading);
• Disarro and Paulino: sections 4b(a)(i, iii, & iv) (fraud) and 4c(a)(1) (wash sales and accommodation trading) and regulation 1.38 (non-competitive trading); and
• Overland: Section 4c(a)(1) (wash sales and accommodation trading) and regulation 1.38 (non-competitive trading).

The CFTC order requires each respondent to cease and desist from further violation of the provisions he is found to have violated and requires the following payment of monetary penalties and suspension of floor broker registrations: Contrino -- $90,000, and four-month suspension; Disarro -- $50,000, and six-month suspension; Overland and Paulino -- $60,000 and six-month suspension each. The order also prohibits Contrino, Disarro, and Paulino from executing customer trades after their suspensions are completed.

Respondents Joseph Gugliaro and John Joyce previously settled with the CFTC on similar terms.

The following Division of Enforcement staff are responsible for the case: Paul Hayeck, John Dunfee, and Jason Gizzarelli.

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Media Contacts
Alan Sobba (202) 418-5080
Dennis Holden (202) 418-5088
Office of External Affairs

Staff Contact
Paul Hayeck, Associate Director
CFTC Division of Enforcement
(202) 418-5312

Related Document
Order