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BEAR & WOLF COMPANY, INC
CASE OUTCOME: FINE of $150,000 and EXPELLED FROM MEMBERSHIP
NFA ID:
0271239
Individuals Involved:
- WOLF COMMODITIES CORP, INC
- BARRY JAY WOLF
ON DECEMBER 31, 1996, NFA'S BUSINESS CONDUCT COMMITTEE ("BCC") ISSUED A COMPLAINT TO WOLF COMMODITIES CORPORATION, INC. ("WCC"), BARRY J. WOLF ("WOLF") AND BEAR & WOLF COMPANY, INC. ("B&W"). THE COMPLAINT ALLEGES THAT WCC, WOLF AND B&W MADE DECEPTIVE AND MISLEADING STATEMENTS TO THE PUBLIC, IN VIOLATION OF NFA COMPLIANCE RULES 2-2(a), 2-26, 2-29(b)(1), 2-29(b)(2) and 2-29(b)(3). IN ADDITION, THE COMPLAINT ALLEGES THAT WCC AND WOLF USED DECEPTIVE AND MISLEADING PROMOTIONAL MATERIAL, IN VIOLATION OF NFA COMPLIANCE RULES 2-29(a)(1), 2-29(b)(1), 2-29(b)(2) and 2-29(b)(3). FURTHER, THE COMPLAINT ALLEGES THAT WCC AND WOLF SUBMITTED MATERIALLY FALSE AND MISLEADING INFORMATION TO NFA, IN VIOLATION OF NFA COMPLIANCE RULE 2-2(f). THE COMPLAINT ALSO ALLEGES THAT WCC AND WOLF REPRESENTED THAT NFA HAS APPROVED OR RECOMMENDED OR IN ANY WAY PASSED UPON THE ABILITIES OF A MEMBER, IN VIOLATION OF NFA COMPLIANCE RULE 2-22. FINALLY, THE COMPLAINT ALLEGES THAT WCC, WOLF AND B&W FAILED TO UPHOLD HIGH STANDARDS OF COMMERCIAL HONOR AND JUST AND EQUITABLE PRINCIPLES OF TRADE, IN VIOLATION OF NFA COMPLIANCE RULE 2-4. Decision:
ON MARCH 12, 1998, A DESIGNATED PANEL OF NFA'S HEARING COMMITTEE ("HEARING PANEL") ISSUED A DECISION TO WCC, WOLF, AND B&W AFTER A HEARING WAS HELD IN THIS MATTER. THE HEARING PANEL FOUND IN COUNT ONE THAT WOLF'S SOLICITATIONS WERE DECEPTIVE AND MISLEADING, OPERATED AS A FRAUD AND DECEIT AND WERE UNBALANCED IN THEIR PRESENTATION OF LIKELIHOOD OF LOSS. THEREFORE, THE HEARING PANEL FOUND THAT WOLF, WCC, AND B&W VIOLATED NFA COMPLIANCE RULES 2-2(a), 2-29(a)(1), 2-29(b)(1), 2-29(b)(2), 2-29(b)(3), AND 2-26. WOLF WCC, AND B&W'S CONDUCT IS INCONSISTENT WITH JUST AND EQUITABLE PRINCIPLES OF TRADE. IN REGARD TO COUNT TWO OF THE COMPLAINT, THE HEARING PANEL FOUND THAT THE PROMOTIONAL MATERIAL USED BY WCC AND WOLF WERE LIKELY TO DECEIVE THE PUBLIC, CONTAINED MATERIAL MISSTATEMENTS OF FACT, AND OMITTED MATERIAL FACTS WCC AND WOLF KNEW MADE THE MATERIALS MISLEADING AND WERE UNBALANCED IN THEIR DISCUSSION OF PROFITS AND LOSS. THEREFORE, WCC AND WOLF VIOLATED NFA COMPLIANCE RULES 2-29(b)(1), 2-29(b)(2), AND 2-29(b)(3). WCC AND WOLF'S CONDUCT IS INCONSISTENT WITH JUST AND EQUITABLE PRINCIPALS OF TRADE. IN REGARD TO COUNT THREE OF THE COMPLAINT, THE HEARING PANEL FOUND THAT THE INFORMATION AND MATERIAL PROVIDED BY WOLF TO NFA WAS MATERIALLY FALSE AND MISLEADING. THEREFORE, WOLF AND WCC VIOLATED NFA COMPLIANCE RULE 2-2(f). WCC'S AND WOLF'S CONDUCT IS INCONSISTENT WITH JUST AND EQUITABLE PRINCIPLES OF TRADE. AS TO COUNT FOUR OF THE COMPLAINT, THE HEARING PANEL FOUND THAT WOLF TOLD A CUSTOMER THAT HE HAD PASSED AN NFA AUDIT WITH "FLYING COLORS" AND THAT IN DOING SO, WCC AND WOLF VIOLATED NFA COMPLIANCE RULE 2-22. FURTHERMORE, AFTER CONSIDERING ALL OF THE RELEVANT TESTIMONY AND DOCUMENTARY EVIDENCE PRESENTED AT THE HEARING AND THE FINDINGS OF FACT AND CONCLUSIONS OF LAW CONCERNING COUNTS ONE THROUGH FOUR, THE PANEL FOUND THAT CONCERNING COUNT FIVE: (1) AT WOLF'S DIRECTION, WCC AND B&W ENGAGED IN A DELIBERATE COURSE OF CONDUCT TO DEFRAUD AND DECEIVE ITS CUSTOMERS; AND (2) WOLF, WCC, AND B&W'S CONDUCT IS INCONSISTENT WITH HIGH STANDARDS OF COMMERCIAL HONOR AND JUST AND EQUITABLE PRINCIPLES OF TRADE. THEREFORE, WOLF, WCC, AND B&W VIOLATED NFA COMPLIANCE RULE 2-4. AS A RESULT OF THE AFOREMENTIONED FINDINGS, THE HEARING PANEL PERMANENTLY EXPELLED WCC AND B&W FROM NFA MEMBERSHIP AND PERMANENTLY BARRED WOLF FROM ASSOCIATION WITH OR ACTING AS A PRINCIPAL OF ANY NFA MEMBER. THE HEARING PANEL ALSO ORDERED WOLF, WCC, AND B&W TO JOINTLY AND SEVERALLY PAY A $150,000.00 FINE. THIS DECISION BECOMES EFFECTIVE MARCH 27, 1998.
Source: National Futures Association
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