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April 18, 1997
Report of Quarterly Actions
Actions Taken During First Quarter 1997
NFA has decided to issue this Notice to Members to replace Volume IX, Issue 1 of the Report of Quarterly Actions publication. This Notice covers disciplinary actions taken by NFAs Business Conduct and Hearing Committees during the first quarter of 1997. NFA expects to resume publication of the Report of Quarterly Actions with the next issue covering actions taken during the second quarter of 1997. If you have any questions or comments, please direct them to Cathy Fields in NFAs Public Affairs and Education Department at 312-781-1373.
In the Matter of American Futures Group, Inc., et al. (George J. Perk, Jr., Thomas G. Reeves and Evan T. Tucker, III)
On March 24, 1997, a designated panel of NFAs Hearing Committee issued a Decision after a hearing against American Futures Group, Inc., (AFG), George J. Perk (Perk), Thomas G. Reeves (Reeves) and Evan T. Tucker, III (Tucker). The Decision expels AFG from NFA membership. The Decision also permanently bars Perk and Reeves from association with and from acting as a principal of any NFA Member. In addition, the Decision suspends Tucker for two years from association with and from acting as a principal of any NFA Member and prohibits him from providing sales training to any employee of any NFA Member. The Decision also restricts Tuckers activities for two years after his suspension. AFG is an FCM, CPO and CTA Member located in New York, New York. Perk is AFGs chairman and chief executive officer and Reeves is the firms president. Tucker is a former vice-president of AFG.
The Panel found that AFG failed to maintain adequate books and financial records [C.R.s 2-10 & 2-31 & F.R. Secs. 6 & D3-a] and that it used deceptive and misleading sales practices at its Seattle branch office [C.R.s 2-29(a)(1), (b)(1) & (2)]. The Panel also found that AFG, Perk, Reeves and Tucker engaged in conduct inconsistent with just and equitable principles of trade in that, at AFG, Perk and Reeves direction, Tucker trained APs of a guaranteed IB to employ high-pressure sales tactics and use deceptive and misleading sales solicitations [C.R. 2-4]. In addition, the Panel found that AFG, Perk and Reeves violated an earlier settlement agreement with NFA and failed to diligently supervise AFGs employees and agents [C.R.s 2-4 and 2-9].
AFG, Perk, Reeves and Tucker have appealed the Hearing Panels Decision to NFAs Appeals Committee and their appeal is pending.
In the Matter of Erik Ding dba 1st World Group
On February 12, 1997, NFAs Business Conduct Committee issued a Decision against Erik Ding dba 1st World Group (1st World). The Decision permanently bars 1st World from NFA membership. By failing to file a response to the Complaint, 1st World is deemed to have admitted the allegations. The Decision became effective on February 27, 1997. 1st World is a former IB Member located in San Francisco, California.
The Committee found that 1st World failed to cooperate in an NFA investigation and submitted materially false information to NFA [C.R.s 2-2(f) & 2-5]. The Committee also found that 1st World used deceptive and misleading promotional material [C.R.s 2-29(b)(1) & (2)].
In the Matter of Crown Futures Corporation, Hal Philip Masover and Stuart Taylor C. Valentine
On February 12, 1997, NFAs Business Conduct Committee issued a Decision based upon a settlement offer submitted by Crown Futures Corporation (Crown), Hal Philip Masover (Masover) and Stuart Taylor C. Valentine (Valentine). The Decision fines Crown, Masover and Valentine, jointly, $7,500. The Decision also orders Crown to continue to employ a full-time operations/compliance officer and maintain updated compliance and operations manuals. In addition, the Decision orders Crown to submit all new promotional materials to NFA for pre-review for one year. Crown, Masover and Valentine neither admitted nor denied the allegations. The Decision became effective on February 27, 1997. Crown is an IB Member located in Fairfield, Iowa. Masover and Valentine are principals of the firm.
The Complaint alleged that Crown promoted and conducted business with trading systems developers who were required to be registered as CTAs but were not registered [C.R. 2-4]. The Complaint also alleged that Crown, Masover and Valentine used deceptive, misleading and unbalanced promotional material which failed to include required disclaimers and which presented actual trading results that were unrepresentative of the performance of comparable accounts. Because of these acts and omissions, the Complaint alleged that Crown violated NFA Compliance Rules 2-29(b)(1), (2), (3), (4), (5) & (6); Masover violated NFA Compliance Rules 2-29(b)(3) & (5); and Valentine violated NFA Compliance Rules 2-29(b)(2), (5) & (6). In addition, the Complaint alleged that Crown, Masover and Valentine failed to maintain copies of promotional material and failed to maintain a written record of review and approval of promotional material [C.R.s 2-9, 2-29(d) & (e)].