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Arbitration Details

PRUDENTIAL EQUITY GROUP LLC NFA ID: 0002914

An NFA Arbitration claim is a futures or forex related dispute involving a customer and an NFA Member (or employee) or Associate. It is not a regulatory action.
NFA only discloses information concerning arbitration cases that have been decided by an arbitration panel. NFA does not release the names of parties who have settled their parts in the cases. Furthermore, NFA does not report or release information on cases that closed before January 1, 1990, cases that are still pending, or cases that were settled, withdrawn or rejected. Therefore, the number of NFA Arbitration Decisions reflects the total number of claims filed in NFA Arbitration that were decided by an arbitration panel. These decisions may have been decided in favor of the Claimant or Respondent.
Effective January 1, 2000, NFA discloses the names of persons who represent parties in NFA customer arbitration proceedings if the matters were decided by an arbitration panel. As of the same date, customers may no longer ask NFA to keep their identities confidential.

Case Summary
 Case No.FiledDecision DateProduct
 95ARB0014107/28/199503/25/1997Futures (Domestic Exchange)
Options (Domestic Exchange)
Summary of Parties
 CustomersMembersRepresentatives
•  IUKA PARK COMMONS INC• WILLIAM ARTHUR CULLMAN JR
•  PRUDENTIAL EQUITY GROUP LLC
• ALAN BRODHERSON
• WARREN COLODNER
• JOHN CONNOLLY
Proceeding Details
 Panel TypeNumber of ArbitratorsProceeding TypeLocation (City, State)
 NON-MEMBER3HEARINGWASHINGTON, DC
Summary of Awards and Claims
 Type Claim Amount Counter Claim 3rd Party Claim Cross Claim
 
Compensatory
Punitive
Treble
Interest
Attorney Fees
Costs
 Claim Award
$2,900,000.00$0.00
$1,000,000.00$0.00
$0.00$0.00
NA$0.00
NA$0.00
NA$0.00
 Claim Award
$0.00$0.00
$0.00$0.00
$0.00$0.00
NA$0.00
NA$0.00
NA$0.00
 Claim Award
$0.00$0.00
$0.00$0.00
$0.00$0.00
NA$0.00
NA$0.00
NA$0.00
 Claim Award
$0.00$0.00
$0.00$0.00
$0.00$0.00
NA$0.00
NA$0.00
NA$0.00
Summary of Issues
THE CLAIMANT ALLEGED:

1. THAT RESPONDENT PRUDENTIAL SECURITIES INC VIOLATED SECTION 4C(D) OF THE COMMODITY EXCHANGE ACT AND COMMISSION REGULATIONS THEREUNDER BY MAKING FALSE, DECEPTIVE AND MISLEADING STATEMENTS OF MATERIAL FACTS AND BY FAILING TO DISCLOSE MATERIAL FACTS TO THE CLAIMANT IN CONNECTION WITH THE SOLICITATION AND PURCHASE OF EXCHANGE TRADED COMMODITY FUTURES AND OFF-EXCHANGE TRADING OF PHYSICALS FOR FUTURES.

2. THAT RESPONDENT PRUDENTIAL SECURITIES INC ENGAGED IN TRANSACTIONS TO BENEFIT THEMSELVES AND IN EXCESSIVE TRADING OR CHURNING OF THE ACCOUNT WHICH ACTIONS WERE DESIGNED TO GENERATE COMMISSIONS FOR THE RESPONDENTS. THESE ACTIONS WERE A BREACH OF THE FIDUCIARY OBLIGATION OWED BY PRUDENTIAL SECURITIES INC TO CLAIMANT AND CONSTITUTE A VIOLATION OF COMMISSION REGULATIONS 33.10 AND VIOLATION OF SECTION 4C(B) OF THE COMMODITY EXCHANGE ACT.

3. THAT PRUDENTIAL SECURITIES INC WAS FULLY RESPONSIBLE FOR THE ACTS OF ITS AGENTS AND ITS EMPLOYEES UNDER SECTION 2(A)(1)(A) OF THE COMMODITY EXCHANGE ACT AND FOR THE DILIGENT SUPERVISION OF SUCH PERSONS. ITS FAILURE TO ADHERE TO THESE STANDARDS WITH RESPECT TO RESPONDENT PRUDENTIAL SECURITIES INC CONSTITUTED A VIOLATION OF COMMISSION REGULATION 166.3.

4. THAT RESPONDENTS BREACHED THEIR EXPRESS WRITTEN AND ORAL AGREEMENTS WITH CLAIMANT BY DOING THE WRONGFUL ACTS ALLEGED HEREIN AND BREACHED THEIR DUTIES TO CLAIMANT BY RECKLESSLY OR NEGLIGENTLY AND WITH AN UNREASONABLE LACK OF SUCH SKILL PRUDENCE AND DILIGENCE COMMONLY POSSESSED AND USED BY LIKE INDIVIDUALS AND FIRMS IN THE RESPONDENTS' PROFESSION MADE EACH OF THE FALSE REPRESENTATIONS AND OMISSIONS, AS WELL AS THE OTHER WRONGFUL ACTS ALLEGED HEREIN.

5. THAT THE FRAUDULENT ACTS INCLUDED MISREPRESENTATIONS OF MATERIAL FACTS AND OMISSIONS OF MATERIAL FACTS BY THE RESPONDENTS CONSTITUTED STATE AND COMMON LAW FRAUD AND DECEIT, NEGLIGENCE AND BREACH OF FIDUCIARY DUTY.

6. THAT THE VIOLATION OF THE COMPLIANCE RULES OF THE NATIONAL FUTURES ASSOCIATION, INCLUDING RULE 2-2 WHICH PROSCRIBES FRAUDULENT ACTIVITIES, RULE 2-29 WHICH PRESCRIBES FALSE AND DECEPTIVE COMMUNICATIONS AND HIGH PRESSURE SALES TACTICS, RULE 2-30 CONCERNING OBTAINING CUSTOMER INFORMATION AND PROVIDING ADDITIONAL RISK DISCLOSURE AND RULE 2-4 WHICH REQUIRES MEMBERS TO OBSERVE HIGH STANDARDS OF COMMERCIAL HONOR AND JUST AND EQUITABLE PRINCIPLES OF TRADE IN THE CONDUCT OF THEIR BUSINESS WHICH RESPONDENTS HAVE BREACHED BY THEIR FRAUDULENT ACTIVITIES AND THEIR CHURNING OF CLAIMANT'S ACCOUNTS. THE VIOLATION OF THESE RULES CONSTITUTE A BREACH OF THEIR FIDUCIARY OBLIGATIONS TO THE CLAIMANT.

THE CLAIMANT'S CLAIMS AGAINST RESPONDENTS PRUDENTIAL SECURITIES INC AND W. ARTHUR CULLMAN JR. ARE DENIED IN THEIR ENTIRETY. THE RESPONDENTS' REQUEST FOR REIMBURSEMENT OF ATTORNEYS' FEES AND EXPENSE IS DENIED. EACH PARTY SHALL BEAR ITS OWN ATTORNEYS' FEES AND COSTS.

 
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