The Commodity Futures Trading Commission (CFTC) today settled charges of compliance and supervisory violations against Rosenthal Collins Group, LLC (RCG), a futures commission merchant based in Chicago, Illinois, and sanctioned the firm $310,000.
The CFTC issued an order on August 26, 2008, which finds that, from April 2003 through December 2005, RCG failed to enforce its compliance procedures and failed to diligently supervise employees in their handling of disbursements from a customer account.
RCG’s compliance rules and procedures prohibited the issuance of third-party checks, unless they were approved by RCG’s Compliance Department or were for payment of a customer’s bona fide business expenses. RCG’s compliance rules and procedures also prohibited cash disbursements to customers unless the customers were approved by RCG’s Compliance Department to receive such cash payments.
The order finds that RCG disbursed cash to an employee of a New York Mercantile Exchange (NYMEX) floor brokerage operation, even though that employee was not an account holder authorized to receive cash from the account. RCG also disbursed numerous checks from the same customer account to third parties without the appropriate approval.
The CFTC order requires RCG to pay a $310,000 civil monetary penalty and implement enhanced supervisory procedures to monitor and enforce compliance rules and assure adherence to rules governing disbursements from customer accounts.
The following CFTC Division of Enforcement staff are responsible for this case: Judith Slowly, Philip Rix, Sheila Marhamati, Steven Ringer, Lenel Hickson, Edward Riccobene, Vincent McGonagle, and Stephen Obie.
