Release: #4671-02
For Release: July 15, 2002
COFFEE COMMODITY TRADERS BRUCE MILLER AND DEIRDRE ANDERSON CHARGED
WITH FRAUDULENT TRADE ALLOCATION SCHEME
George Lamborn and Richard Lani Sr. Alleged To Have Failed to
Diligently Supervise Miller and Anderson’s Trading
CSCE Floor Brokers, Daniel Lipton and Kenneth Lawson, Charged With
Failing to Obtain Required Customer Account Identification
WASHINGTON, DC – The Commodity Futures Trading Commission (CFTC)
announced today the filing of an administrative complaint against
Bruce Miller (Miller), currently residing in Barcelona, Spain, and
Deirdre Anderson (Anderson) of Staten Island, New York, charging
them with fraudulently allocating trades in coffee futures and allowing
certain preferred customers including, in part, those with whom Miller
had some familial, business or financial interest, to earn profits in
excess of $400,000 while trading at Lamborn Securities, Inc. (LSI), a now
defunct introducing broker.
The CFTC complaint charges George Lamborn (Lamborn), of
Southampton, New York, president of LSI, and Richard Lani (Lani)
of Princeton, New Jersey, with failing to supervise diligently
Miller’s and Anderson’s trading at Lamborn. In addition, the
complaint alleges that Daniel Lipton (Lipton) of Long Beach, New
York, and Kenneth Lawson (Lawson) of Brooklyn, New York, both
floor brokers on the Coffee, Sugar and Cocoa Exchange, Inc., failed to
obtain required customer account identification from Miller and Anderson
when they were placing orders to the floor of the exchange.
The complaint, filed on July 15, 2002, specifically alleges that from
March until July 1997, and from June to July 1998, Miller and Anderson
fraudulently allocated winning trades in coffee futures to certain
preferred customers which included Miller’s family, business
associates and entities in which Miller had a hidden financial interest.
According to the complaint, Miller and Anderson and others under their
direction at LSI placed over 400 customer orders buying and selling over
3,600 coffee futures contracts with clerks working for Lipton, Lawson and
another floor broker without providing sufficient customer account
identification. After the orders were executed and Miller and Anderson
were able to determine which trades were profitable, they allocated the
winning trades to their preferred customers and losing trades to other
customers, according to the complaint.
The complaint also alleges that Lamborn and Lani failed to detect this
fraudulent allocation scheme because they did not diligently supervise
Miller and Anderson. Lamborn and Lani failed to design and implement a
system of supervision to review adequately office order tickets and
investigate irregular trading activity.
A public hearing has been ordered to determine whether the allegations
are true, and, if so, what sanctions would be appropriate in the public
interest.
The following CFTC Division of Enforcement staff are responsible for this
case: Charles J. Sgro, Lenel Hickson, Jr., Beth R. Morgenstern, Steven
Ringer, Christina Kang, and John Cipriani.
A copy of the CFTC’s complaint may be obtained at
www.cftc.gov.
Media Contact
Charles J. Sgro
Regional Counsel, Eastern Regional Office
CFTC Division of Enforcement (646) 746-9759
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