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BAY LIMITED
CASE OUTCOME: PERMANENT WITHDRAWAL FROM NFA MEMBERSHIP
NFA ID:
0226102
Individuals Involved:
- ALVIN GRIFFIN DONOVAN, III
- DANIEL BRUCE STARK
ON OCTOBER 3, 1990, THE CENTRAL REGIONAL BUSINESS CONDUCT COMMITTEE ("CENTRAL COMMITTEE") ISSUED A COMPLAINT AGAINST BAY LIMITED ("BAY LIMITED") AND DANIEL BRUCE STARK ("STARK"). THE COMPLAINT ALLEGES THAT BAY LIMITED VIOLATED NFA BYLAW 301(B) AND NFA REGISTRATION RULE 204 BY PERMITTING ALVIN GRIFFIN DONOVAN, III ("DONOVAN") TO ACT IN A CAPACITY REQUIRING REGISTRATION AS AN ASSOCIATED PERSON WITHOUT THE BENEFIT OF PROPER REGISTRATION AND FAILING TO LIST DONOVAN AS ONE OF ITS PRINCIPALS IN ITS REGISTRATION DOCUMENTS. DONOVAN WAS CHARGED WITH HAVING BEEN A CAUSE OF SUCH VIOLATIONS. THE COMPLAINT ALSO ALLEGES THAT BAY LIMITED VIOLATED NFA COMPLIANCE RULE 2-5 BY FAILING TO COOPERATE IN AN NFA INVESTIGATION AND VIOLATED NFA COMPLIANCE RULE 2-9 BY FAILING TO SUPERVISE ITS EMPLOYEES AND AGENTS IN THE CONDUCT OF THEIR COMMODITY FUTURES ACTIVITIES. STARK IS CHARGED WITH HAVING BEEN A CAUSE OF BAY LIMITED'S FAILURE TO SUPERVISE. THE COMPLAINT FURTHER ALLEGES THAT BAY LIMITED AND STARK VIOLATED NFA COMPLIANCE RULE 2-4 BY FAILING TO OBSERVE HIGH STANDARDS OF COMMERCIAL HONOR AND JUST AND EQUITABLE PRINCIPLES OF TRADE. FINALLY, THE COMPLAINT ALLEGES THAT BAY LIMITED VIOLATED NFA COMPLIANCE RULES 2-29(B)(2) AND 2-29(B)(3) BY USING PROMOTIONAL MATERIAL WHICH WAS MISLEADING AND UNBALANCED AND VIOLATED NFA COMPLIANCE RULE 2-29(D) BY FAILING TO MAINTAIN WRITTEN PROCEDURES TO SUPERVISE ITS ASSOCIATES AND EMPLOYEES IN THE USE OF ITS PROMOTIONAL MATERIAL OR COMMUNICATIONS. Decision:
ON JANUARY 22, 1992, THE CENTRAL COMMITTEE ISSUED A DECISION IN WHICH IT ACCEPTED BAY LIMITED'S SETTLEMENT OFFER IN WHICH IT NEITHER ADMITTED NOR DENIED THE ALLEGATIONS CONTAINED IN THE COMPLAINT. THE DECISION ORDERED BAY LIMITED TO PERMANENTLY WITHDRAW FROM NFA MEMBERSHIP AND COMMODITY FUTURES TRADING COMMISSION REGISTRATION. THE DECISION FURTHER ORDERED DONOVAN NOT TO APPLY TO BE A PRINCIPAL, BRANCH OFFICE MANAGER OR TO ACT IN A SUPERVISORY CAPACITY FOR AN NFA MEMBER FOR FIVE YEARS AND NOT TO APPLY TO BE AN ASSOCIATE OF AN NFA MEMBER FOR ONE YEAR.
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