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INDUSTRIAL INVESTMENTS CORPORATION
CASE OUTCOME: PERMANENT WITHDRAWAL FROM NFA MEMBERSHIP
NFA ID:
0218142
Complaint:
ON MARCH 4, 1993, NFA'S CENTRAL REGIONAL BUSINESS CONDUCT COMMITTEE ("CENTRAL COMMITTEE") ISSUED A COMPLAINT TO INDUSTRIAL INVESTMENTS CORPORATION ("IIC"), ROBERT E. KOMMERS ("KOMMERS"), AND HAROLD H. MORRIS ("MORRIS"). THE COMPLAINT ALLEGES THAT IIC, KOMMERS AND MORRIS USED FALSE, DECEPTIVE AND UNBALANCED PROMOTIONAL MATERIAL WHICH INCLUDED A DESCRIPTION OF HYPOTHETICAL RESULTS WITHOUT HAVING SUPPORT FOR SUCH RESULTS IN VIOLATION OF NFA COMPLIANCE RULES 2-29(B)(1), 2-29(B)(3), 2-29(B)(4) and 2-29(E). THE COMPLAINT ALSO ALLEGES THAT IIC AND MORRIS DECEIVED COMMODITY FUTURES CUSTOMERS IN VIOLATION OF NFA COMPLIANCE RULE 2-29(A)(1). FURTHERMORE, THE COMPLAINT ALLEGES THAT IIC, KOMMERS AND MORRIS EXERCISED DISCRETION OVER CUSTOMER ACCOUNTS WITHOUT HAVING WRITTEN AUTHORITY TO EXERCISE SUCH DISCRETION IN VIOLATION OF NFA COMPLIANCE RULE 2-8(A). MOREOVER, THE COMPLAINT ALLEGES THAT IIC FAILED TO DILIGENTLY SUPERVISE EMPLOYEES AND AGENTS IN VIOLATION OF NFA COMPLIANCE RULE 2-9 AND KOMMERS IS ALLEGED TO BE THE CAUSE OF THIS VIOLATION. Decision:
ON OCTOBER 28, 1993, THE CENTRAL COMMITTEE ISSUED A DECISION IN WHICH IT ACCEPTED THE OFFERS OF SETTLEMENT SUBMITTED BY IIC, KOMMERS AND MORRIS. IN THEIR OFFERS OF SETTLEMENT, IIC, KOMMERS AND MORRIS NEITHER ADMITTED NOR DENIED THE ALLEGATIONS OF THE COMPLAINT. THE DECISION ORDERS IIC TO WITHDRAW FROM NFA MEMBERSHIP AND NEVER AGAIN REAPPLY FOR NFA MEMBERSHIP IN ANY CAPACITY. THE DECISION ORDERS KOMMERS NOT TO ACT AS A PRINCIPAL OF AN NFA MEMBER OR AS A BRANCH OFFICE MANAGER OF AN NFA MEMBER FOR A PERIOD OF THREE YEARS. THE DECISION ALSO ORDERS KOMMERS TO PAY A $5,000 FINE. THE DECISION ORDERS MORRIS TO CAUSE HIS SPONSOR TO TAPE RECORD ALL TELEPHONE CONVERSATIONS BETWEEN MORRIS AND BOTH EXISTING AND POTENTIAL CUSTOMERS AS WELL AS TO CAUSE HIS SPONSOR TO SUBMIT TO NFA A WRITTEN SUPERVISORY AGREEMENT OBLIGATING THE SPONSOR TO IMPLEMENT THE TAPE RECORDING REQUIREMENT. IN ADDITION, THE DECISION ORDERS MORRIS TO PAY A $5,000 FINE. THIS DECISION BECOMES EFFECTIVE NOVEMBER 8, 1993.
Source: National Futures Association
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