The traders named in the complaint are Sean Loftus, Elizabeth Loftus, Michael Imperio, Mosze Szlafrok, Peter Iovanella, Christopher Pindar, Steven Compitello, Jeremy Lubcher, Richard Karmen, Peter Karmen, Michael Moore, Joseph Diamond, Ben Wong, Michael Norton, and Michael Nonomiya.
The plaintiff group is attempting to prevent the NYBOT from using Klein & Co. customer funds held by the NYBOT and its affilliate, NYCC, in connection with trading on the NYMEX and COMEX Divisions of the Exchange and other markets to satisfy obligations of an unrelated customer of Klein & Co. on the New York Futures Exchange Division of the NYBOT, an action which is alleged to be in violation of section 4d of the Commodity Exchange Act.
The complaint, which has been filed in U.S. District Court, states that the NYBOT and N.Y. Clearing Corp have acted in bad faith because they knew the funds belonged to innocent, non-defaulting customers. The complaint alleges that members of the board of directors of the NYBOT represent other clearing members who could otherwise be assessed to make up the shortfall. The complaint says, "They are acting for their own self interest or other ulterior motive to the detriment of the public, including plaintiffs; and their conduct in this regard, which is their sole or dominant motive, is unrelated to and contrary to proper regulatory concern."
According to the Exchange, the Commodity Futures Trading Commission has indicated its willingness to support the plaintiff group and is considering filing an amicus brief.
R. Patrick Thompson, president of the New York Mercantile Exchange, said, "As an exchange and a clearing organization, we are particularly disturbed to see other such organizations threaten to and seize identifiable funds of individual customers to satisfy the obligations of a separate customer. This is an amount which should be covered by the Clearing Corp.'s guarantee fund, which is intended for such purposes. These actions not only impact traders who cleared through Klein & Co. at our exchange, but taint the image and integrity of the entire futures industry."
