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FSG INTERNATIONAL INCORPORATED
CASE OUTCOME: PERMANENT WITHDRAWAL FROM NFA MEMBERSHIP
NFA ID:
0202011
Complaint:
On November 11, 1999, NFA's Business Conduct Committee ("BCC") issued a Complaint to FSG International, Inc. ("FSG"), Carlos M. Mormeneo ("Mormeneo") and Harold E. Seigel ("Seigel"). The Complaint alleges that FSG made deceptive and misleading sales solicitations, in violation of NFA Compliance Rules 2-2(a) and 2-29(a)(1). The Complaint also alleges that FSG induced or suggested that individuals falsify personal financial information, in violation of NFA Compliance Rule 2-30(a). The Complaint further alleges that FSG used promotional material that was deceptive, misleading and unbalanced in the presentation of the possibility of profit and the risk of loss and failed to submit promotional material to NFA promptly after first use as required by NFA's Compliance Director, in violation of NFA Compliance Rules 2-29(b)(1), (2), and (3) and 2-29(g). In addition, the Complaint alleges that FSG, Mormeneo and Seigel failed to uphold high standards of commercial honor and just and equitable principles of trade, in violation of NFA Compliance Rule 2-4. Finally, the Complaint alleges that FSG, Mormeneo and Seigel failed to diligently supervise employees and agents in the conduct of their commodity futures activities, in violation of NFA Compliance Rule 2-9(a). Decision:
On November 13, 2000, NFA's Hearing Panel ("Panel") issued a Decision accepting FSG, Mormeneo and Seigel's settlement offer. Without admitting or denying the allegations of the Complaint, FSG, Mormeneo and Seigel stipulated that the Decision includes findings that they committed the violations alleged in the Complaint; that those findings may be used in any future disciplinary action filed against Mormeneo and/or Seigel; and that in the event of a future disciplinary action filed against Mormeneo and/or Seigel, then the violations alleged in the present case shall be deemed admitted by Mormeneo and Seigel. The Panel ordered that FSG, Mormeneo and Seigel shall jointly and severally pay a $500,000 fine within two years of the issuance of the Decision. The Panel also ordered FSG to permanently withdraw from NFA membership within ninety days of the issuance of the Decision and never reapply for NFA membership. Finally, the Panel ordered that Mormeneo and Seigel shall, for two years after the issuance of the Decision, cause any and all NFA Member firms of which either is a principal or has an ownership interest - as well as any guaranteed introducing brokers thereof - to: (a) tape record all conversations between APs and customers or prospective customers; and (b) submit all promotional material to NFA, prior to using same, for NFA's review and approval and only use promotional material approved by NFA. This Decision becomes effective November 28, 2000.
Source: National Futures Association
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