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Case Summary

MBH COMMODITY ADVISORS INC NFA 96BCC00015 NFA ID: 0001782

Respondent/Effective Date Summary
 NFA IDRespondentEffective Date
 0054855BERNSTEIN, JACOB03/08/1999
 0001782MBH COMMODITY ADVISORS INC03/08/1999
Rule Summary
 NFA IDRespondentRule Type
 0054855BERNSTEIN, JACOB• C.R.2-29(b)(3) - BALANCED DISCUSSION RE PROFIT/RISK
  • C.R.2-29(b)(2) - MISSTATEMT/OMISSION OF FACT PROMP
  • C.R.2-29(b)(1) - USE OF DECEPTIVE PROMO MATER.
  • C.R.2-29(a)(3) - REPS THAT FUTURES APPROPRIATE ALL
  • C.R.2-29(a)(1) - FRAUDULENT COMM. TO PUBLIC PROHIB.
  • C.R.2-29(c) - STATEMENT OF OPINION
 0001782MBH COMMODITY ADVISORS INC• C.R.2-29(b)(3) - BALANCED DISCUSSION RE PROFIT/RISK
  • C.R.2-29(b)(2) - MISSTATEMT/OMISSION OF FACT PROMP
  • C.R.2-29(b)(1) - USE OF DECEPTIVE PROMO MATER.
  • C.R.2-29(a)(3) - REPS THAT FUTURES APPROPRIATE ALL
  • C.R.2-29(a)(1) - FRAUDULENT COMM. TO PUBLIC PROHIB.
  • C.R.2-29(c) - STATEMENT OF OPINION
Committee Summary
 NFA IDRespondentCommittee
 0054855BERNSTEIN, JACOB• APPEALS COMMITTEE
  • BUSINESS CONDUCT COMMITTEE
 0001782MBH COMMODITY ADVISORS INC• BUSINESS CONDUCT COMMITTEE
  • APPEALS COMMITTEE
Action Summary
 NFA IDRespondentAction Types
 0054855BERNSTEIN, JACOB• SALES PRACTICE
 0001782MBH COMMODITY ADVISORS INC• SALES PRACTICE
Penalty/Event Summary
 NFA IDRespondentPenalty/EventEvent Date
 0054855BERNSTEIN, JACOB• FINE $200000
  • AFFIRMED ON APPEAL - FEDERAL COURT05/07/2001
  • PERMANENT BAR FROM NFA MEMBERSHIP05/05/2000
  • ON APPEAL - FEDERAL COURT04/13/2000
  • AFFIRMED ON APPEAL - CFTC03/31/2000
 0001782MBH COMMODITY ADVISORS INC• EXPELLED FROM MEMBERSHIP
  • FINE $200000
  • AFFIRMED ON APPEAL - FEDERAL COURT05/07/2001
  • ON APPEAL - FEDERAL COURT04/13/2000
  • AFFIRMED ON APPEAL - CFTC03/31/2000
Narrative Summary
General Case Narrative
COMPLAINT:

ON DECEMBER 31, 1996, NFA'S BUSINESS CONDUCT COMMITTEE ("BCC") ISSUED A COMPLAINT TO MBH COMMODITY ADVISORS, INC. ("MBH") AND JACOB BERNSTEIN ("BERNSTEIN"). THE COMPLAINT ALLEGES THAT MBH AND BERNSTEIN USED MISLEADING AND DECEPTIVE PROMOTIONAL MATERIAL, IN VIOLATION OF NFA COMPLIANCE RULES 2-29(a)(1), 2-29(b)(1), AND 2-29(b)(2). IN ADDITION, THE COMPLAINT ALLEGES THAT MBH AND BERNSTEIN USED PROMOTIONAL MATERIAL THAT MENTIONED THE POSSIBILITY OF PROFIT AND FAILED TO MENTION THE RISK OF LOSS IN AN EQUALLY PROMINENT MANNER, IN VIOLATION OF NFA COMPLIANCE RULE 2-29(b)(3). FURTHER, THE COMPLAINT ALLEGES THE MBH AND BERNSTEIN USED PROMOTIONAL MATERIAL WHICH STATES THAT FUTURES TRADING IS APPROPRIATE FOR ALL PERSONS, IN VIOLATION OF NFA COMPLIANCE RULE 2-29(a)(3). FINALLY, THE COMPLAINT ALLEGES THAT MBH AND BERNSTEIN USED PROMOTIONAL MATERIAL WHICH CONTAINED HYPOTHETICAL RESULTS WITHOUT INCLUDING THE REQUIRED DISCLAIMER, IN VIOLATION OF NFA COMPLIANCE RULE 2-29(c)(1).

ANSWER TO COMPLAINT:

ON FEBRUARY 3, 1997, MBH AND BERNSTEIN FILED AN ANSWER TO THE COMPLAINT IN WHICH THEY DENIED THE MATERIAL ALLEGATIONS CONTAINED THEREIN AND REQUESTED A HEARING BEFORE NFA'S HEARING COMMITTEE.

DECISION:

ON MAY 5, 1998, A DESIGNATED PANEL OF NFA'S HEARING COMMITTEE ISSUED A DECISION TO MBH AND BERNSTEIN AFTER A HEARING WAS HELD. AFTER CONSIDERING ALL OF THE RELEVANT TESTIMONY AND DOCUMENTARY EVIDENCE PRESENTED AT THE HEARING, THE PANEL FOUND THAT MBH AND BERNSTEIN VIOLATED NFA COMPLIANCE RULES 2-29(a)(1), 2-29(b)(1), 2-29(a)(3), 2-29(b)(3), AND 2-29(c)(1). THE PANEL ALSO FOUND THAT MBH'S AND BERNSTEIN'S CONDUCT IS INCONSISTENT WITH JUST AND EQUITABLE PRINCIPLES OF TRADE.

AS A RESULT OF ITS FINDINGS, THE PANEL EXPELLED MBH FROM NFA MEMBERSHIP AND BARRED BERNSTEIN FROM ASSOCIATION WITH OR BEING A PRINCIPAL OF ANY NFA MEMBER. THE PANEL ALSO ORDERED MBH AND BERNSTEIN TO PAY A $200,000.00 FINE. MBH AND BERNSTEIN ARE JOINTLY AND SEVERALLY LIABLE FOR THE FINE. THIS DECISION BECOMES EFFECTIVE MAY 20, 1998.

NOTICE OF APPEAL:

ON MAY 20, 1998, MBH AND BERNSTEIN FILED A NOTICE OF APPEAL OF THE HEARING PANEL'S DECISION WITH NFA'S APPEALS COMMITTEE.

APPEAL DECISION:

ON FEBRUARY 19, 1999, NFA'S APPEALS COMMITTEE ("COMMITTEE") ISSUED A DECISION TO MBH AND BERNSTEIN. THE COMMITTEE AFFIRMED ALL OF THE SANCTIONS IMPOSED BY THE HEARING PANEL. THIS DECISION BECOMES EFFECTIVE MARCH 8, 1999.

NOTICE OF APPEAL/PETITION FOR STAY

ON OR ABOUT MARCH 1, 1999, MBH AND BERNSTEIN FILED AN APPEAL OF THE APPEALS COMMITTEE'S DECISION WITH THE CFTC, AND A PETITION FOR A STAY OF THE EFFECTIVE DATE OF THE DECISION.

CFTC ORDER:

ON MARCH 22, 1999, THE CFTC DENIED MBH AND BERNSTEIN'S PETITION FOR A STAY.

CFTC ORDER:

On March 31, 2000, the CFTC established that the findings and conclusions of NFA are supported by the weight of the evidence. The CFTC further concluded that NFA committed no error material to the outcome of this proceeding and that the parties generally have not raised important questions of law or policy that merit extended discussion. The CFTC affirmed NFA's Decision without opinion, that a $200,000 civil money penalty is justified based upon the gravity of appellant's wrongdoing and that any error that the Hearing Committee committed by considering evidence outside the record was harmless.

APPEAL -

On April 13, 2000, MBH Commodity Advisors, Inc. and Bernstein filed a petition for review in the United States Court of Appeals for the Seventh Circuit.

APPEAL -

On May 7, 2001, the Seventh Circuit issued a Decision affirming the CFTC's Order.

 
Narrative for 0054855 - BERNSTEIN, JACOB
COMPLAINT:

ON DECEMBER 31, 1996, NFA'S BUSINESS CONDUCT COMMITTEE ("BCC") ISSUED A COMPLAINT TO MBH COMMODITY ADVISORS, INC. ("MBH") AND JACOB BERNSTEIN ("BERNSTEIN"). THE COMPLAINT ALLEGES THAT MBH AND BERNSTEIN USED MISLEADING AND DECEPTIVE PROMOTIONAL MATERIAL, IN VIOLATION OF NFA COMPLIANCE RULES 2-29(a)(1), 2-29(b)(1), AND 2-29(b)(2). IN ADDITION, THE COMPLAINT ALLEGES THAT MBH AND BERNSTEIN USED PROMOTIONAL MATERIAL THAT MENTIONED THE POSSIBILITY OF PROFIT AND FAILED TO MENTION THE RISK OF LOSS IN AN EQUALLY PROMINENT MANNER, IN VIOLATION OF NFA COMPLIANCE RULE 2-29(b)(3). FURTHER, THE COMPLAINT ALLEGES THE MBH AND BERNSTEIN USED PROMOTIONAL MATERIAL WHICH STATES THAT FUTURES TRADING IS APPROPRIATE FOR ALL PERSONS, IN VIOLATION OF NFA COMPLIANCE RULE 2-29(a)(3). FINALLY, THE COMPLAINT ALLEGES THAT MBH AND BERNSTEIN USED PROMOTIONAL MATERIAL WHICH CONTAINED HYPOTHETICAL RESULTS WITHOUT INCLUDING THE REQUIRED DISCLAIMER, IN VIOLATION OF NFA COMPLIANCE RULE 2-29(c)(1).

ANSWER TO COMPLAINT:

ON FEBRUARY 3, 1997, MBH AND BERNSTEIN FILED AN ANSWER TO THE COMPLAINT IN WHICH THEY DENIED THE MATERIAL ALLEGATIONS CONTAINED THEREIN AND REQUESTED A HEARING BEFORE NFA'S HEARING COMMITTEE.

DECISION:

ON MAY 5, 1998, A DESIGNATED PANEL OF NFA'S HEARING COMMITTEE ISSUED A DECISION TO MBH AND BERNSTEIN AFTER A HEARING WAS HELD. AFTER CONSIDERING ALL OF THE RELEVANT TESTIMONY AND DOCUMENTARY EVIDENCE PRESENTED AT THE HEARING, THE PANEL FOUND THAT MBH AND BERNSTEIN VIOLATED NFA COMPLIANCE RULES 2-29(a)(1), 2-29(b)(1), 2-29(a)(3), 2-29(b)(3), AND 2-29(c)(1). THE PANEL ALSO FOUND THAT MBH'S AND BERNSTEIN'S CONDUCT IS INCONSISTENT WITH JUST AND EQUITABLE PRINCIPLES OF TRADE.

AS A RESULT OF ITS FINDINGS, THE PANEL EXPELLED MBH FROM NFA MEMBERSHIP AND BARRED BERNSTEIN FROM ASSOCIATION WITH OR BEING A PRINCIPAL OF ANY NFA MEMBER. THE PANEL ALSO ORDERED MBH AND BERNSTEIN TO PAY A $200,000.00 FINE. MBH AND BERNSTEIN ARE JOINTLY AND SEVERALLY LIABLE FOR THE FINE. THIS DECISION BECOMES EFFECTIVE MAY 20, 1998.

NOTICE OF APPEAL:

ON MAY 20, 1998, MBH AND BERNSTEIN FILED A NOTICE OF APPEAL OF THE HEARING PANEL'S DECISION WITH NFA'S APPEALS COMMITTEE.

APPEAL DECISION:

ON FEBRUARY 19, 1999, NFA'S APPEALS COMMITTEE ("COMMITTEE") ISSUED A DECISION TO MBH AND BERNSTEIN. THE COMMITTEE AFFIRMED ALL OF THE SANCTIONS IMPOSED BY THE HEARING PANEL. THIS DECISION BECOMES EFFECTIVE MARCH 8, 1999.

NOTICE OF APPEAL/PETITION FOR STAY

ON OR ABOUT MARCH 1, 1999, MBH AND BERNSTEIN FILED AN APPEAL OF THE APPEALS COMMITTEE'S DECISION WITH THE CFTC, AND A PETITION FOR A STAY OF THE EFFECTIVE DATE OF THE DECISION.

CFTC ORDER:

ON MARCH 22, 1999, THE CFTC DENIED MBH AND BERNSTEIN'S PETITION FOR A STAY.

CFTC ORDER:

On March 31, 2000, the CFTC established that the findings and conclusions of NFA are supported by the weight of the evidence. The CFTC further concluded that NFA committed no error material to the outcome of this proceeding and that the parties generally have not raised important questions of law or policy that merit extended discussion. The CFTC affirmed NFA's Decision without opinion, that a $200,000 civil money penalty is justified based upon the gravity of appellant's wrongdoing and that any error that the Hearing Committee committed by considering evidence outside the record was harmless.

APPEAL -

On April 13, 2000, MBH Commodity Advisors, Inc. and Bernstein filed a petition for review in the United States Court of Appeals for the Seventh Circuit.

APPEAL -

On May 7, 2001, the Seventh Circuit issued a Decision affirming the CFTC's Order.

 
Narrative for 0001782 - MBH COMMODITY ADVISORS INC
COMPLAINT:

ON DECEMBER 31, 1996, NFA'S BUSINESS CONDUCT COMMITTEE ("BCC") ISSUED A COMPLAINT TO MBH COMMODITY ADVISORS, INC. ("MBH") AND JACOB BERNSTEIN ("BERNSTEIN"). THE COMPLAINT ALLEGES THAT MBH AND BERNSTEIN USED MISLEADING AND DECEPTIVE PROMOTIONAL MATERIAL, IN VIOLATION OF NFA COMPLIANCE RULES 2-29(a)(1), 2-29(b)(1), AND 2-29(b)(2). IN ADDITION, THE COMPLAINT ALLEGES THAT MBH AND BERNSTEIN USED PROMOTIONAL MATERIAL THAT MENTIONED THE POSSIBILITY OF PROFIT AND FAILED TO MENTION THE RISK OF LOSS IN AN EQUALLY PROMINENT MANNER, IN VIOLATION OF NFA COMPLIANCE RULE 2-29(b)(3). FURTHER, THE COMPLAINT ALLEGES THE MBH AND BERNSTEIN USED PROMOTIONAL MATERIAL WHICH STATES THAT FUTURES TRADING IS APPROPRIATE FOR ALL PERSONS, IN VIOLATION OF NFA COMPLIANCE RULE 2-29(a)(3). FINALLY, THE COMPLAINT ALLEGES THAT MBH AND BERNSTEIN USED PROMOTIONAL MATERIAL WHICH CONTAINED HYPOTHETICAL RESULTS WITHOUT INCLUDING THE REQUIRED DISCLAIMER, IN VIOLATION OF NFA COMPLIANCE RULE 2-29(c)(1).

ANSWER TO COMPLAINT:

ON FEBRUARY 3, 1997, MBH AND BERNSTEIN FILED AN ANSWER TO THE COMPLAINT IN WHICH THEY DENIED THE MATERIAL ALLEGATIONS CONTAINED THEREIN AND REQUESTED A HEARING BEFORE NFA'S HEARING COMMITTEE.

DECISION:

ON MAY 5, 1998, A DESIGNATED PANEL OF NFA'S HEARING COMMITTEE ISSUED A DECISION TO MBH AND BERNSTEIN AFTER A HEARING WAS HELD. AFTER CONSIDERING ALL OF THE RELEVANT TESTIMONY AND DOCUMENTARY EVIDENCE PRESENTED AT THE HEARING, THE PANEL FOUND THAT MBH AND BERNSTEIN VIOLATED NFA COMPLIANCE RULES 2-29(a)(1), 2-29(b)(1), 2-29(a)(3), 2-29(b)(3), AND 2-29(c)(1). THE PANEL ALSO FOUND THAT MBH'S AND BERNSTEIN'S CONDUCT IS INCONSISTENT WITH JUST AND EQUITABLE PRINCIPLES OF TRADE.

AS A RESULT OF ITS FINDINGS, THE PANEL EXPELLED MBH FROM NFA MEMBERSHIP AND BARRED BERNSTEIN FROM ASSOCIATION WITH OR BEING A PRINCIPAL OF ANY NFA MEMBER. THE PANEL ALSO ORDERED MBH AND BERNSTEIN TO PAY A $200,000.00 FINE. MBH AND BERNSTEIN ARE JOINTLY AND SEVERALLY LIABLE FOR THE FINE. THIS DECISION BECOMES EFFECTIVE MAY 20, 1998.

NOTICE OF APPEAL:

ON MAY 20, 1998, MBH AND BERNSTEIN FILED A NOTICE OF APPEAL OF THE HEARING PANEL'S DECISION WITH NFA'S APPEALS COMMITTEE.

APPEAL DECISION:

ON FEBRUARY 19, 1999, NFA'S APPEALS COMMITTEE ("COMMITTEE") ISSUED A DECISION TO MBH AND BERNSTEIN. THE COMMITTEE AFFIRMED ALL OF THE SANCTIONS IMPOSED BY THE HEARING PANEL. THIS DECISION BECOMES EFFECTIVE MARCH 8, 1999.

NOTICE OF APPEAL/PETITION FOR STAY

ON OR ABOUT MARCH 1, 1999, MBH AND BERNSTEIN FILED AN APPEAL OF THE APPEALS COMMITTEE'S DECISION WITH THE CFTC, AND A PETITION FOR A STAY OF THE EFFECTIVE DATE OF THE DECISION.

CFTC ORDER:

ON MARCH 22, 1999, THE CFTC DENIED MBH AND BERNSTEIN'S PETITION FOR A STAY.

CFTC ORDER:

On March 31, 2000, the CFTC established that the findings and conclusions of NFA are supported by the weight of the evidence. The CFTC further concluded that NFA committed no error material to the outcome of this proceeding and that the parties generally have not raised important questions of law or policy that merit extended discussion. The CFTC affirmed NFA's Decision without opinion, that a $200,000 civil money penalty is justified based upon the gravity of appellant's wrongdoing and that any error that the Hearing Committee committed by considering evidence outside the record was harmless.

APPEAL -

On April 13, 2000, MBH Commodity Advisors, Inc. and Bernstein filed a petition for review in the United States Court of Appeals for the Seventh Circuit.

APPEAL -

On May 7, 2001, the Seventh Circuit issued a Decision affirming the CFTC's Order.

 
Case Documents Summary
No case documents have been found for this case.
 
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