Release: #3996-97 (CFTC Docket # 96-5)

For Release: February 27, 1997

CFTC Accepts Settlement Offer from Mark J. Sitzmann, David E. Sitzmann, and Sitzmann Commodities Inc., In Connection with CFTC Action Filed in 1996

WASHINGTON--The Commodity Futures Trading Commission (CFTC) announced today that it has issued an order accepting an offer of settlement from Mark J. Sitzmann, a former vice-president of commodity management for Monfort Inc., a ConAgra subsidiary; David E. Sitzmann of LeMars, Iowa, and Sitzmann Commodities Inc. also of LeMars, Iowa , in connection with a complaint filed by the CFTC on April 18, 1996. (See CFTC News Release #3904-96, April 18, 1996.)

The CFTC order finds that Mark Sitzmann cheated, defrauded and deceived Monfort. Specifically, the order finds that Mark Sitzmann was responsible for developing and implementing Monfort's hedging strategies. In order to perform these responsibilities, Monfort, according to the order, entrusted him with non-public and proprietary information regarding its position in the cash and futures markets. Although Monfort prohibited all of its executives from trading commodity futures contracts, Mark Sitzmann opened an account in his brother David's name at Sitzmann Commodities and traded based upon the information he had obtained in the course of his employment. Mark placed orders for his trading account immediately before placing much larger orders for Monfort on the same side of the market in the same futures contract. The Monfort orders would move the market, and Mark would subsequently exit the position at a profit.

The CFTC order also finds that David Sitzmann aided and abetted Mark Sitzmann's fraudulent activities by allowing Mark to open an account in David's name at Sitzmann Commodities, placing orders ahead of Monfort's orders, funneling all of the money to and from Mark's futures account through one of David's checking accounts and filing a false large trader report with the Commission representing that he owned and controlled the account that was actually Mark's. Finally, the order finds that David Sitzmann, as controlling person of Sitzmann Commodities, is liable for Sitzmann Commodities' failure to maintain accurate records

Mark Sitzmann, without admitting or denying the findings of the Commission order, consented to the entry of a CFTC order:

• finding that he cheated , defrauded and deceived Monfort and failed to file a large trader report with the Commission (Sections 4b(a)(i), 4b(a)(iii), 4i of the CEA and Regulation 18.04);

• directing Mark Sitzmann to cease and desist from further violations;

• prohibiting Mark Sitzmann from trading on or subject to the rules of any contract market for ten (10) years;

• ordering Mark Sitzmann to comply with his undertaking never to apply for registration with the Commission; and

• ordering Mark Sitzmann to pay $50,000 in partial restitution to Monfort.

David Sitzmann, without admitting or denying the findings of the Commission order, consented to the entry of a CFTC order:

• finding that he aided and abetted Mark Sitzmann in cheating, defrauding and deceiving Monfort, filed a false large trader report and that he is liable, as controlling person of Sitzmann Commodities, for its failure to maintain accurate records (Sections 4b(a)(i), 4b(a)(iii) and 6(c) of the CEA and Regulations 1.37 and 18.04(a));

• directing David Sitzmann to cease and desist from further violations;

• prohibiting David Sitzmann from trading on or subject to the rules of any contract market; and

• revoking David Sitzmann's registration.

Sitzmann Commodities, without admitting or denying the findings of the Commission order, consented to the entry of a CFTC order:

• finding that it failed to maintain accurate records (Regulation 1.37);

• directing it to cease and desist from further violations; and

• revoking its registration as an Introducing Broker.