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May 01, 2013
NFA takes emergency enforcement action against Robert Juan Escobio, an associated person and principal of Southern Trust Securities, Inc., a futures firm located in Coral Gables, Florida
May 1, Chicago - National Futures Association (NFA) announced today that it has taken an emergency enforcement action against Robert Juan Escobio (Escobio) an associated person (AP) and principal of Southern Trust Securities Inc. (ST Securities). ST Securities is an NFA Member introducing broker (IB) and commodity trading advisor (CTA) currently located in Coral Gables, Florida.
NFA has taken the Associate Responsibility Action (ARA) to protect Escobio's customers since Escobio is soliciting and accepting funds for ST Metals, an unregistered and unregulated futures commission merchant (FCM).
Based on a customer complaint, NFA began an emergency examination of ST Securities on April 8, 2013. NFA was concerned that an affiliated entity of ST Securities, ST Metals, was acting as an unregistered FCM. Although the customer assumed that she would be trading physical metals, NFA noticed that all the customer trades were actually futures trades executed on U.S. exchanges. ST Metals is not registered with the Commodity Futures Trading Commission (CFTC) and is not an NFA Member. Under CFTC Regulations, only registered FCMs are authorized to accept customer funds to margin futures transactions.
After questioning by NFA, Escobio voluntarily liquidated all customer positions. Since ST Metals is not authorized to hold customer funds, NFA asked Escobio to transfer the funds to an NFA Member FCM. This process was completed the week of April 15, 2013. NFA is subsequently issuing this ARA to ensure that Escobio does not transfer, distribute or otherwise withdraw the funds. Escobio is also prohibited from soliciting or accepting any customer funds used to margin futures trades.
The ARA will remain in effect until such time as Escobio has demonstrated to the satisfaction of NFA that he is in complete compliance with all NFA Requirements. Escobio may request a hearing before NFA's Hearing Committee.