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AMERICAN FINANCIAL TRADING CORP
CASE OUTCOME:Company Barred from NFA and CFTC Registration.
NFA ID:
0267144
Individuals Involved:
- DONOFRIO, JOHN PETER
- FEDERAL TRADING CORP
- GOLDMAN, SAMMY JOE
- ROMEO, TED LAMAR
On October 11, 2001, NFA's Business Conduct Committee ("BCC") issued a Complaint to Ted L. Romeo ("Romeo"), American Financial Trading Corp. ("AFTC"), Federal Trading Corp. ("Federal"), John P. Donofrio ("Donofrio") and Sammy J. Goldman ("Goldman"). The Complaint alleges that Romeo, AFTC and Federal made deceptive, misleading and high-pressured sales solicitations, in violation of NFA Compliance Rules 2-2(a), 2-29(a)(1) and 2-29(a)(2). The Complaint also alleges that AFTC, Federal, Donofrio and Goldman failed to diligently supervise employees and agents in the conduct of their commodity futures activities, in violation of NFA Compliance Rule 2-9. Decision:
DECISION - GOLDMAN:
On December 16, 2002, NFA's Hearing Panel ("Panel") issued a Decision accepting Goldman's settlement offer in which he neither admitted nor denied the allegations of the Complaint. The Panel ordered that Goldman not undertake any activities which would require his registration as an associated person ("AP") including, but not limited to, hiring APs, firing APs, disciplining APs, attending sales meeting or training of APs, reviewing promotional material, handling customer complaints, or performing any other activities which, either directly or indirectly, involved the supervision of APs unless Goldman is duly registered as a supervising AP. From time to time, NFA may require and Goldman must provide a sworn statement to NFA detailing his activities. The Panel also ordered that the charge of failure to supervise against Goldman remain pending for a one-year period from the date of issuance of the Decision subject to the following conditions:
1. if during the one-year probationary period, the BCC issues a Complaint against Goldman alleging failure to supervise, the Decision and the findings of violation shall stand; and 2. if during the one-year probationary period, the BCC does not issue a Complaint against Goldman alleging failure to supervise, the pending failure to supervise charge shall be withdrawn and the findings of violation shall be vacated. The Decision becomes effective December 31, 2002. DECISION - ROMEO: On December 16, 2002 the Panel issued a Decision accepting Romeo's settlement offer in which he neither admitted nor denied the allegations of the Complaint. The Panel ordered Romeo to withdraw from NFA associate membership and principal status and not reapply for NFA membership, associate membership, or act as a principal of any NFA Member for three years, commencing February 3, 2003. The Panel also ordered Romeo to pay a $50,000 fine within five days of becoming an NFA Member or NFA Associate or principal of an NFA Member, after the expiration of the three-year NFA Membership withdrawal. In addition, the Panel ordered Romeo to tape record all conversations with customer and prospective customers for one year, in accordance with NFA's telemarketing requirements and not act as a supervisory AP for one year. Finally, the Panel ordered that only periods during which Romeo is actually a Member or Associate Member, or principal of an NFA Member shall be credited toward the fulfillment of the ordered obligations. The Decision becomes effective December 31, 2002. DECISION - AFTC, FEDERAL AND D'ONOFRIO: On December 16, 2002, the Panel issued a Decision, in conjunction with NFA Case No. 02-BCC-012, accepting the settlement offers of AFTC, Federal and D'Onofrio in which, without admitting or denying the allegations of the Complaint, they consented to findings that they committed the violations. The Panel ordered that Federal and D'Onofrio, jointly and severally, pay a $75,000 fine in eighteen monthly installments commencing on January 3, 2003. The Panel also ordered that Federal and D'Onofrio tape record all conversations with customers and prospective customers, in accordance with NFA's Telemarketing Requirements, for two years, commencing on January 3, 2003. In addition, the Panel ordered that for six months, D'Onofrio and any firm of which he is a principal tape record all conversations with customers and prospective customers, in accordance with NFA's Telemarketing Requirements, commencing on January 3, 2002, provided that D'Onofrio is a principal of an NFA Member on that date, otherwise the six-month period will commence at such a date that D'Onofrio becomes a principal of an NFA Member. The Panel ordered that only the periods during which D'Onofrio is actually a Member or an Associate Member, or a principal of an NFA Member will be credited toward the fulfillment of the ordered obligations. Further, the Panel ordered that for a period of one year, Federal and D'Onofrio will forward all customer complaints to NFA within one week of receipt (including, but not limited to oral, written and electronic complaints) against D'Onofrio, Federal, and/or any other firm of which D'Onofrio is a principal. Finally, the Panel ordered that AFTC never again reapply at any time for NFA membership or CFTC registration in any capacity. The Decision becomes effective December 31, 2002.
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