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DM MCKENZIE AND ASSOCIATES, INC
CASE OUTCOME: PERMANENT WITHDRAWAL FROM NFA MEMBERSHIP
NFA ID:
0215215
Complaint:
ON FEBRUARY 12, 1992, NFA'S CENTRAL REGIONAL BUSINESS CONDUCT COMMITTEE ("CENTRAL COMMITTEE") ISSUED AN EIGHT COUNT COMPLAINT AGAINST D.M. MCKENZIE & ASSOCIATES, INC. ("MCKENZIE"). THE COMPLAINT ALLEGES THAT JONATHAN SPECTOR ("SPECTOR"), AN ASSOCIATED PERSON ("AP") OF MCKENZIE, USED PROMOTIONAL MATERIAL WHICH WAS FALSE, DECEPTIVE AND MISLEADING AND DISCUSSED THE POSSIBILITY OF PROFIT WITHOUT OFFERING AN EQUALLY PROMINENT DISCUSSION OF THE RISK OF LOSS. THE COMPLAINT CHARGES MCKENZIE WITH VIOLATING NFA COMPLIANCE RULES 2-2(a), 2-29(a)(1) AND 2-29(b)(1), (b)(2) AND (b)(3). THE COMPLAINT ALSO ALLEGES THAT MCKENZIE FAILED TO IDENTIFY DISCRETIONARY TRADES AND FAILED TO DOCUMENT ITS REVIEW OF DISCRETIONARY TRADES IN VIOLATION OF NFA COMPLIANCE RULE 2-8(b); THAT MCKENZIE DID NOT APPROVE DISCRETIONARY AUTHORITY IN WRITING PRIOR TO ANY OPTION TRADING FOR SOME ACCOUNTS IN VIOLATION OF NFA COMPLIANCE RULE 2-20(b); THAT MCKENZIE USED PROMOTIONAL MATERIAL WHICH WAS DECEPTIVE AND MISLEADING AND LACKED THE REQUIRED LEGEND FOR HYPOTHETICAL PERFORMANCE IN VIOLATION OF NFA COMPLIANCE RULES 2-29(b)(1), (b)(2) AND (b)(4); THAT MCKENZIE CONDUCTED COMMODITY FUTURES BUSINESS WITH NON-NFA MEMBERS IN VIOLATION OF NFA BYLAW 1101; THAT MCKENZIE FAILED TO MAINTAIN REQUIRED CUSTOMER INFORMATION IN VIOLATION OF NFA COMPLIANCE RULE 2-30(g); THAT MCKENZIE FAILED TO MAINTAIN REQUIRED BOOKS AND RECORDS IN VIOLATION OF NFA COMPLIANCE RULE 2-10; AND THAT MCKENZIE FAILED TO DILIGENTLY SUPERVISE ITS BRANCH OFFICES IN VIOLATION OF NFA COMPLIANCE RULE 2-9. Decision:
ON JUNE 24, 1992, THE CENTRAL COMMITTEE ISSUED A DECISION TO MCKENZIE, ACCEPTING ITS SETTLEMENT OFFER. THE CENTRAL COMMITTEE ORDERED MCKENZIE TO PERMANENTLY WITHDRAW FROM NFA MEMBERSHIP. THE CENTRAL COMMITTEE ALSO ORDERED MCKENZIE TO IMMEDIATELY APPLY TO WITHDRAW ITS INTRODUCING BROKER AND COMMODITY POOL OPERATOR REGISTRATIONS WITH THE COMMODITY FUTURES TRADING COMMISSION AND TO NEVER REAPPLY FOR SUCH REGISTRATION.
Source: National Futures Association
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