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1ST COMMODITY CORP OF THE CAROLINAS
CASE OUTCOME: PERMANENT WITHDRAWAL FROM NFA MEMBERSHIP
NFA ID:
0203487
Complaint:
ON JUNE 12, 1990, THE EASTERN REGIONAL BUSINESS CONDUCT COMMITTEE ("EASTERN COMMITTEE") ISSUED A COMPLAINT AGAINST 1ST COMMODITY CORPORATION OF THE CAROLINAS D/B/A FIRST FUTURES GROUP ("FFG") AND STEVEN GREGORY GASS ("GASS"). THE COMPLAINT ALLEGES THAT FFG AND GASS VIOLATED NFA COMPLIANCE RULES 2-2(A), 2-29(A)(1) AND 2-29(A)(2) BY CHEATING, DEFRAUDING OR DECEIVING OR ATTEMPTING TO CHEAT, DEFRAUD OR DECEIVE COMMODITY FUTURES CUSTOMERS AND BY MAKING COMMUNICATION WITH THE PUBLIC WHICH OPERATES AS A FRAUD OR DECEIT AND WHICH EMPLOYS OR IS PART OF A HIGH-PRESSURE APPROACH. THE COMPLAINT ALSO ALLEGES THAT FFG VIOLATED NFA COMPLIANCE RULES 2-29(B)(2) AND 2-29(B)(3) BY USING PROMOTIONAL MATERIAL WHICH OMITS FACTS MAKING THE PROMOTIONAL MATERIAL MISLEADING AND WHICH MENTIONS THE POSSIBILITY OF PROFIT WITHOUT AN EQUALLY PROMINENT STATEMENT OF THE RISK OF LOSS; VIOLATED NFA COMPLIANCE RULE 2-29(E) BY FAILING TO MAINTAIN A RECORD OF THE REVIEW AND APPROVAL OF PROMOTIONAL MATERIAL; AND VIOLATED NFA COMPLIANCE RULE 2-15 BY FAILING TO ENFORCE WRITTEN OPTION PROCEDURES. THE COMPLAINT FURTHER ALLEGES THAT FFG VIOLATED NFA COMPLIANCE RULE 2-30(G) BY FAILING TO MAINTAIN A RECORD OF CUSTOMER INFORMATION; VIOLATED NFA COMPLIANCE RULES 2-19 AND 2-26 BY FAILING TO OBTAIN A SIGNED ACKNOWLEDGEMENT OF RECEIPT OF AN OPTION RISK DISCLOSURE STATEMENT OR A RISK DISCLOSURE STATEMENT FOR ITS ACCOUNTS; AND VIOLATED NFA COMPLIANCE RULE 2-10 BY FAILING TO MAINTAIN ADEQUATE RECORDS. FINALLY, THE COMPLAINT ALLEGES THAT FFG VIOLATED NFA FINANCIAL REQUIREMENTS SECTION 9 BY FAILING TO MAINTAIN WRITTEN AUTHORIZATION FOR A QUALIFYING BANK ACCOUNT AND VIOLATED NFA REGISTRATION RULE 210(A) BY FAILING TO CORRECT A DEFICIENCY IN ITS FORM 7-R. Decision:
D/B/A FIRST FUTURES GROUP ON NOVEMBER 14, 1990, THE EASTERN COMMITTEE ISSUED A DECISION IN WHICH IT ACCEPTED FFG'S SETTLEMENT OFFER. FFG NEITHER ADMITTED NOR DENIED THE ALLEGATIONS CHARGED IN THE COMPLAINT, BUT PURSUANT TO ITS OFFER, FFG AGREED TO PERMANENTLY WITHDRAW FROM NFA MEMBERSHIP.
Source: National Futures Association
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