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Date Posted: 22:32:48 02/25/06 Sat
Author: Colonel Angus
Subject: Ken Wolf Commodities Inc.

No. 53-99
December 24, 1999

Weekly Advisory

Commodity Futures Trading Commission Three Lafayette Centre 1155 21st Street, NW Washington, DC 20581 Telephone: (202) 418-5080 Facsimile: (202) 418-5525
Home Page: http://www.cftc.gov
Antoinette B. McCoy, Editor



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Commission Meetings
On December 17, 1999, the Commission held a closed meeting to discuss surveillance matters


CFTC News Releases

Release: #4349-99 (CFTC Docket No. 00-02)
For Release: December 20, 1999

CFTC FILES AND SETTLES ACTION AGAINST GEORGE W. VELISSARIS FOR COMMODITY POOL FRAUD

CFTC Finds that Velissaris Defrauded Investors by Misappropriating Commodity Pool Funds and Misrepresenting the Profitability of the Commodity Pools, and Orders Restitution to Defrauded Investors, Among Other Sanctions

WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that it issued an order on December 16, 1999, instituting administrative proceedings against and simultaneously accepting an offer of settlement from George W. Velissaris, of Northbrook, Illinois. Velissaris was registered as an associated person of Paine Webber Inc., from April 1985 until February 1989, but has not been registered with the CFTC in any capacity since that time.

The CFTC order finds that Velissaris violated the anti-fraud provisions of the Commodity Exchange Act (CEA) (sections 4b(a)(i)-(iii), 4o(1)) by making misrepresentations about the profitability of his commodity pools when soliciting investors, misappropriating investor funds, and issuing statements to investors that falsely represented that the commodity pools were profitable.

The CFTC's order finds that Velissaris was the sole managing partner of ACG Partners, L.P. (ACG), and that, as such, he fraudulently operated two successive commodity pools, ACG I and ACG II, from March 1996 through July 1998. The order specifically finds that Velissaris fraudulently solicited and accepted at least $323,000 from investors in ACG I, lost approximately $61,000 trading commodity futures, misappropriated at least $99,000, repaid three ACG I investors using, in part, funds he solicited from investors in ACG II, and issued false statements to pool participants.

The CFTC's order also finds that Velissaris violated CFTC regulation 4.20(c) by withdrawing $82,000 from ACG's checking account and transferring those funds to his personal account, thus commingling the property of the two pools he operated with his own funds.

Without admitting or denying the CFTC's findings, Velissaris consented to the entry of the order that:

-- directs him to cease and desist from violating the provisions of the CEA and CFTC regulations with which he was charged;

-- permanently prohibits him from trading on contract markets;

-- orders him to pay $103,662.93 as restitution, plus interest, to defrauded investors, pursuant to a five-year payment plan;

-- requires him to liquidate all futures and options positions held by him or on his behalf, or in which he has any beneficial interest; and

-- requires him to comply with his undertakings, including that he never seek registration or exemption from registration in any capacity with the CFTC, and never engage in any activity requiring registration or exemption from registration.


Release: #4350-99 (CFTC Docket No.00-03)
For Release: December 20, 1999

CFTC FILES ADMINISTRATIVE COMPLAINT AGAINST CARL DEAN DIXON, CHARGING THAT HE COMMITTED COMMODITY FRAUD AND FAILED TO REGISTER AS A COMMODITY TRADING ADVISOR

CFTC Alleges that Dixon Made Misrepresentations and Deceptive Statements and Provided False Reports in Connection With His Fraudulent Solicitation of, and Advice to, Students of His Futures Trading Course

WASHINGTON ­ The Commodity Futures Trading Commission (CFTC) announced today that on December 16, 1999, it filed a three-count anti-fraud administrative complaint against Carl Dean Dixon, last known to reside in Davie, Florida.

The complaint alleges that Dixon committed fraud by means of misrepresentations and deceptive statements made to prospective and actual futures trading students concerning, among other things, his experience and success as a futures trader, and by creating false reports purporting to show his profitable trading in violation of the anti-fraud provisions of the Commodity Exchange Act (CEA). The complaint also alleges that Dixon violated the CEA's registration provisions by failing to register as a commodity trading advisor (CTA) while acting in that capacity.

Specifically, the complaint alleges that between at least January and December 1998, Dixon offered a Treasury bond futures trading course to the public, promising to teach a trading methodology that would yield high returns over a short period, and offering a double-money-back guarantee if students did not earn at least a certain weekly sum after using the methodology for a few weeks. Dixon, however, failed to teach such a system or return the students' tuition, the complaint alleges.

Dixon also allegedly solicited students by making material misrepresentations that he was an experienced and successful futures trader whose successes resulted in an opulent lifestyle. Dixon, however, was neither experienced nor successful as a commodity trader and was verging on bankruptcy, according to the complaint.

Dixon also solicited two students using sham account statements reflecting phony trading profits to reinforce his assertions that he was a profitable, high-volume trader for his own account, the complaint alleges. Furthermore, it is alleged that Dixon solicited students by claiming to have taught students to become successful traders using his trading methods, when in fact he had rarely, if ever, taught students to trade successfully.

The complaint alleges that Dixon's solicitations were false, deceptive and misleading because they misstated and failed to disclose facts material to the students' decisions to sign up for his tutoring, all in violation of sections 4b and 4o of the CEA. The complaint also alleges that Dixon also failed to register as a commodity trading advisor in violation of section 4m(1) of the CEA.

A public hearing has been ordered to determine whether the allegations are true, and, if so, what sanctions are appropriate in the public interest.


Release: #4351-99 (CIV-92-6832)
For Release: December 20, 1999

Florida District Court Orders $2.29 Million in Disgorgement from Marc Stephen Wuensch for Commodity Options Fraud

WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that on December 7, 1999, U.S. District Court Judge Ursula Ungaro-Benages of the Southern District of Florida entered a final order of disgorgement of $ 2.29 million against Marc Stephen Wuensch of Pembroke Pines, Florida, in CFTC v. Trinity Financial Group, Inc. et al. Wuensch was formerly the president of Carrington Financial Corp. Inc. and sales manager of Trinity Financial Group, Inc., both registered introducing brokers in Aventura, Florida. As the court previously found, this case involved the fraudulent solicitation of customers to purchase options on commodity futures contracts.

On September 29, 1997, after a 17-day trial, the court found Carrington and Wuensch liable for "systematic and willful" violations of the anti-fraud and supervisory provisions of the Commodity Exchange Act (CEA) in connection with the fraudulent solicitation of customers. Among other things, the court found that "Carrington and Wuensch failed to establish and maintain meaningful procedures for deterring and detecting fraud by their employees, that Wuensch knew of specific incidents of misconduct and failed to take reasonable steps to correct the problems," and that "the improper sales practices . . . continued since the filing of this action with Wuensch's approval and active participation."

The court also found that associated persons at Carrington fraudulently solicited customers by misrepresenting and omitting material facts concerning, among other things, the profit potential of and risks involved in trading commodity options.

In the September 29, 1997 order, the court also permanently enjoined Wuensch and Carrington from violating the anti-fraud and supervisory provisions of the CEA, and permanently enjoined the remaining defendant, Frank Sidoti, from violating the registration provisions of the CEA. Further, the court ordered defendants to disgorge all profits that Wuensch and Sidoti received from Carrington and Trinity, prohibited the transfer of assets, and ordered Carrington, Wuensch, and Sidoti to transfer all books and records to a receiver, among other relief. The court appointed a receiver who seized control of Carrington and terminated its operations. Subsequently, the Commission staff worked with the receiver in the preparation of a report and recommendation for disgorgement to the court.

In the December 7, 1999 order, the court stated that Trinity's and Carrington's business operations under Wuensch's supervision and control were "pervasively fraudulent," and that "Wuensch encouraged, condoned, and participated in pervasive fraud." The court based its $2.29 million order of disgorgement upon Wuensch's undisputed income from Trinity's and Carrington's fraudulent activity during the years 1991 through 1994, the period for which there was record evidence of fraud.


Opinions Updates
No Opinions Updates were issued during this period.


Seriatim Actions
On December 12, 1999, the Commission authorized for publication in the Federal Register a proposed rulemaking regarding the establishment of trading prohibitions for persons associated with self-regulatory organizations -- Commission Regulation 1.59.


Federal Register Notices
The Chicago Mercantile Exchange proposed amendments to its oriented strand board futures contract. Vol. 64, No. 243, 12/20/99, p. 7112.

Comment Periods
NOTE:

All Comment Letters must be received by the Commission no later than the closing date specified in the applicable Federal Register release. Any requests for an extension of the comment period must be made in writing - - before the expiration of the comment period - - to the Commission's Office of the Secretariat.


--------------------------------------------------------------------------------

Comment period concerning the Commission's proposal to eliminate fees for futures and option contract market applications ends, December 27, 1999.

Comment period concerning the Chicago Mercantile Exchange's proposal to amend its oriented strand board futures contract ends, January 4, 2000.

Comment period concerning the Commission's proposal to revise its procedures for the review of contract market rules and rule amendments ends, January 25, 2000.

Comment period concerning the Commission's proposal to amend its rules to create an exemption from registration requirements for commodity trading advisors that provide advice by means of media such as newsletters, Internet web sits, and non-customized computer software ends, February 7, 2000.

Initial Decisions
Gerald P. Bellizzi v. Brandon Financial Group, Inc. (d/b/a "Ken Wolf Commodities"), David Jude Javor, LFG, L.L.C., and Kenneth J. Wolf. Filed December 17, 1999. Complainant and respondents filed a stipulation of dismissal. Accordingly, the proceeding was dismissed. Joel R. Maillie, Judgment Officer. CFTC Docket No. 99-R141.

Brigid O. Hensley v. Coastal Commodities Corporation, Universal Financial Holding Corp., and Raymond Vincent Giguere. Filed December 17, 1999. Respondents Universal, Giguere and Coastal failed to make the second payment under the terms of a settlement agreement and thus breached the settlement agreement. Respondents agreed that in the event of such a breach, they would be subject to a default sanction in the full amount of the claim, less any amount received from the respondents. Accordingly, the stay was vacated and based on respondents' default, it was concluded that Raymond Vincent Giguere and Costal Commodities Corporation had violated the CEAct and Commission regulations causing $15,270.25 in damages; and that Universal Financial Holding Corporation was liable as guarantor of Coastal Commodities. Universal Financial Holding Corporation, Coastal Commodities Corporation and Raymond Vincent Giguere were ordered to pay to Brigid O. Hensley reparations of $15,270.25, plus interest on that amount at 5.670% compounded annually from April 3, 1998, to the date of payment, plus $125 in costs for the filing fee, less any amount received from the respondents. Philip V. McGuire, Judgment Officer. CFTC Docket No. 99-R69.

Randy C. Laumb and Cindy Laumb v. Rosenthal Collins Group, LLC d/b/a Spike Trading Division and William R. Bowens, II. Filed December 21, 1999. The parties settled this matter and submitted a joint notice of satisfaction and withdrawal of complaint. Accordingly, this matter was dismissed. Philip V. McGuire, Judgment Officer. CFTC Docket No. 99-R181.


Opinions and Orders
No Opinions and Orders were issued during this period.


CFTC Letters
No CFTC Letters were issued during this period.

Reminders
The Commodity Futures Trading Commission's Office of Public Affairs has updated the "Foreign Instrument Approvals & Exemptions," Backgrounder. To obtain a copy, please contact the Office of Public Affairs at (202) 418-5080 or visit the Commission's website at http://www.cftc.gov. (See Attachment.)


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Updated February 1, 2001

29-03
July 18, 2003

Weekly Advisory
Commodity Futures Trading Commission - Three Lafayette Centre - 1155 21st Street, NW
Washington, DC 20581 Telephone: (202) 418-5080 - Facsimile: (202) 418-5525
Homepage: http://www.cftc.gov


--------------------------------------------------------------------------------

Events
On July 21, 2003, Chairman James E. Newsome will attend a White House meeting to mark the first anniversary of the Corporate Fraud Task Force, Washington, DC.

Commission Meetings
On July 18, 2003, The Commission will hold a closed meeting to discuss surveillance matters.

CFTC News Releases
Release: #4818-03
For Release: July 14, 2003

CFTC SETTLES FRAUD CHARGES WITH CALIFORNIA RESIDENT MICHAEL INGWERSON

WASHINGTON, D.C. -- The U.S. Commodity Futures Trading Commission (CFTC) announced today the filing and simultaneous settlement of an administrative enforcement action against Michael Ingwerson of Campbell, California. The CFTC order finds that Ingwerson, a publisher of a commodity futures trading manual, fraudulently marketed his commodity futures trading publications and services to the public.

Specifically, the order, filed on July 11, 2003, finds that, over a three-year period beginning in January 2000, Ingwerson used fraudulent representations when soliciting the public to purchase the Magic Money Manual and other related commodity futures trading publications and services. According to the order, those solicitations were made through a website, www.trademaniac.com, as well as promotional brochures that falsely represented the profit potential and risks of commodity futures trading. The order, furthermore, finds that the promotional materials suggested that Ingwerson had become financially independent using his method of commodity futures trading, when, in fact, any profits he made were minimal and not nearly enough to make him financially independent. In addition, the order finds that Ingwerson, acting as a commodity trading advisor, through such conduct defrauded clients and prospective clients in violation of the Commodity Exchange Act and CFTC regulations.

The CFTC order directs Ingwerson to:

cease and desist from further violations of the CEA;
pay a $59,000 civil penalty and agree not to apply for registration with the Commission; and
not make misrepresentations in the future regarding profits and risks associated with trading futures.
A copy of the CFTC order may be found at http://www.cftc.gov

The following Division of Enforcement staff were responsible for this case: Paul G. Hayeck, Peter M. Haas, Ghassan Hitti, and Kyong J. Koh.

Media Enforcement Contact:
Paul Hayeck
Associate Director
CFTC Division of Enforcement
(202) 418-5312

Release: #4819-03
For Release: July 14, 2003
CFTC ANNOUNCES COMPLETION OF APPOINTMENT OF SENIOR TEAM OF THE DIVISION OF CLEARING AND INTERMEDIARY OVERSIGHT

WASHINGTON, D.C. – The Commodity Futures Trading Commission (CFTC) today announced several new appointments to the Division of Clearing and Intermediary Oversight (DCIO) to complete the senior management team (see organizational chart).

James L. Carley, Deputy Director, Audit and Financial Review. Mr. Carley joined the Commission in May 1999 and comes to DCIO from the Office of Chairman James E. Newsome where he served as Counsel and as a liaison to DCIO and the Division of Market Oversight. Previously he was Special Counsel in the Audit and Financial Review Section in the former Division of Trading and Markets (T&M). He received his J.D. from George Mason University School of Law, and earned an M.B.A. from The University of Texas Graduate School of Business and a B.S. in Economics from George Mason University. Mr. Carley is a member of the Virginia Bar and the District of Columbia Bar. He has been designated as a Certified Management Accountant and is Certified in Production and Inventory Management.

Thomas J. Smith, Associate Director and Chief Accountant, Audit and Financial Review. Mr. Smith began his career at the Commission in 1992 as a Law Clerk to the Honorable Bruce C. Levine. In 1994 he joined T&M’s Contract Markets Section as an Attorney-Advisor and has served as DCIO’s interim Deputy Director for Audit and Financial Review since July 2002. He received his J.D. from the George Mason University School of Law and earned a B.S. in Accounting from Manhattan College. Mr. Smith is member of the Virginia Bar and District of Columbia Bar and is licensed as a Certified Public Accountant.

Steven L. Byers, Chief Financial Economist, Office of the Director. Dr. Byers joins the Commission from the Office of the Comptroller of the Currency where he worked in the Risk Analysis Division. He received his Ph.D. in Economics in 1999 from Colorado State University, a M.Sc. in Mathematical Trading and Finance at City University in London, an International MBA from the University of Denver and his B.S. in engineering as Colorado State University.

Carlene Kim, Special Counsel for Securities, Office of the Director. Ms. Kim joins the Commission from The Dreyfus Corporation where she served as Assistant General Counsel. Prior to joining Dreyfus, Ms. Kim was with the law firm of Orrick, Herrington and Sutcliffe. She spent eight years in the Division of Market Regulation at the Securities and Exchange Commission, initially as an Attorney and later as a Special Counsel in the Office of Risk Management and Control. She received her J.D. from Georgetown University Law Center and a B.A. from the University of Pennsylvania. She is a member of the New York Bar.

Natalie Markman, Special Counsel, Office of the Director. Ms. Markman most recently served as Legal Counsel to former Commissioner Thomas J. Erickson. She has been with the Commission since 1994, and has worked as an Attorney-Advisor and as a Special Counsel in the Office of International Affairs and the Division of Trading and Markets. Ms. Markman received a J.D. from the Georgetown University Law Center and a B.S. in Journalism from the University of Florida. She is a member of the District of Columbia Bar and the Florida Bar.

Release: #4820-03
For Release: July 15, 2003
CFTC Adopts Core Principle for CTAs’ Presentation of Performance of Partially Funded Accounts

WASHINGTON, D.C. – Commodity Trading Advisors (CTAs) will be able to present the past performance of their partially funded client accounts in a manner consistent with a core principle adopted by the Commodity Futures Trading Commission (CFTC).

The core principle specifies that a CTA may present the performance of partially funded accounts in a manner that is balanced and is not in violation of the Commission’s antifraud provisions. In adopting this rule, the Commission stated that the core principle would not preclude the development of more specific guidance, by self-regulatory organizations or others. The Commission also confirmed that CTAs following the specific rules it proposed in March 2003 would be in compliance with the core principle.

The CFTC is advancing the aim of the Commodity Futures Modernization Act of 2000 (CFMA) by replacing standardized, detailed requirements for intermediaries, when appropriate, with a core principle approach that allows for greater flexibility, creativity, and innovation.

“The Commission today validates the principle of presenting past performance of partially funded accounts in a way that ensures customer protection while allowing for the flexibility needed to respond to evolving industry developments and practices,” said Chairman James E. Newsome.

The rules are being published in the Federal Register and will be in effect 30 days after publication. Copies of the rule can be obtained by contacting the Office of the Secretariat, Three Lafayette Centre, 1155, 21st Street, N.W., Washington, DC 20581, (202) 418-5100 or by accessing the Commodity Futures Trading Commission website at www. cftc.gov.

Release: #4821-03
For Release: July 15, 2003
CFTC ANNOUNCES APPROVAL OF EXCHANGE RULES IMPLEMENTING CME/CBOT COMMON CLEARING LINK

WASHINGTON, D.C. – The Commodity Futures Trading Commission (CFTC) today announced the approval of rules submitted by the Chicago Board of Trade (CBOT) and the Chicago Mercantile Exchange (CME), pursuant to Section 5c(c)(3) of the Commodity Exchange Act, implementing a Common Clearing Link (Link) between the two largest U.S. futures exchanges. The Link is an agreement under which the CME will provide clearing and related services for all CBOT products. Under the terms of the Link, clearing services are expected to begin in November.

The Commission is aware that the Link and these rules have generated considerable discussion in the futures industry. Indeed, the policy and legal issues involved have been well known to interested parties since they were initially raised at the CFTC Clearing Roundtable held almost a year ago. CBOT, CME and the Board of Trade Clearing Corporation have consulted widely with their members and the Commission about this project and submitted to the Commission an agreed transition schedule on June 13.

Under the Commodity Exchange Act, the Commission is not obligated to publish rule submissions of self-regulatory organizations. Nevertheless, based upon the many expressions of interest in this matter, the Commission decided to provide a short comment period.

The rules are necessary for the orderly implementation of the Link and will provide continuity of financial integrity and customer protection in the futures markets. The Commission believes that the Link and these rules further the Commodity Futures Modernization Act’s goal of supporting innovation in the futures industry.

The Commission’s decision was based upon the information before it, including comment letters from several interested parties. The Commission is aware of public and industry interest in related policy issues regarding market structure and competition, and looks forward to hearing more on these issues. The Commission believes, however, that this broader dialogue should not impede the planning necessary to move forward to implement the Link in an orderly manner. The Commission believes that it is of paramount importance to enhance legal certainty concerning the procedures to implement the Link so that all affected parties may make plans as necessary for a smooth and orderly transition beginning in November.

Seriatim Actions
On July 15, 2003, the Commission authorized for publication in the Federal Register a release announcing the amendment of Commission rules 4.10, 4.25 and 4.35 regarding presentation of the past performance of commodity trading advisors for partially funded accounts.

On July 15, 2003, the Commission authorized for publication in the Federal Register rule amendments submitted by Chicago Board of Trade and the Chicago Mercantile Exchange implementing the CME/CBT Clearing Services Agreement.

Federal Register Notices
The Commodity Futures Trading Commission is seeking public comment on the Chicago Mercantile Exchange’s request that the Commission approve proposed amendments to the Exchange’s live cattle futures contract restricting delivery to cattle born and raised in the United States. Vol. 68, No. 135, 07/15/03, p. 41783.

Comment Periods
Note: The Commission must receive all Comment Letters no later than the closing date specified in the applicable Federal Register release. Any request for an extension of the comment period must be made in writing — before the expiration of the comment period — to the Commission's Office of the Secretariat.

Comment period concerning the Commodity Futures Trading Commission’s proposal to amend its regulations to allow futures commission merchants (FCMs) and derivatives clearing organizations (DCOs) to engage in repurchase agreements with securities deposited by customers subject to certain conditions and to modify the portfolio time-to-maturity requirements for securities deposited in connection with certain collateral management programs of DCOs pursuant to certain conditions, ends, July 30, 2003.

Comment period concerning the Chicago Mercantile Exchange’s proposed amendments to its live cattle futures contract restricting delivery to cattle born and raised in the United States ends, July 30, 2003.

Comment period concerning the Commodity Futures Trading Commission’s proposal to amend its minimum financial and related reporting requirements for futures commission merchants and introducing brokers ends, September 8, 2003.

Initial Decisions
William Parigian v. Ken Wolf Commodities d/b/a Brandon Financial Group, Inc., National Commodities Corp., Inc., David Jude Javor, Donovan T. Stiltner. Filed July 9, 2003. Parigian had received payment under the terms of a settlement agreement with respondents. Accordingly, the matter was dismissed. Philip V. McGuire, Judgment Officer. CFTC Docket No. 03-R007.

William O. and Phyllis Dannhausen v. First Liberty Investment Service, Inc., Jeffrey Paul Jedlicki, Rosemary Salveggi and Universal Financial Holding Corp. Filed July 15, 2003. The parties stipulated to the terms of a settlement agreement. Accordingly, the complaint was dismissed with prejudice and terminated in its entirety. Administrative Law Judge, Bruce C. Levine. CFTC Docket No. 02-R069.

Opinions and Orders
No Opinions and Orders were issued during this period.

CFTC Letters
No CFTC Letters were issued during this period.


--------------------------------------------------------------------------------

Updated July 17, 2003

Ken Wolf Commodities, LLC
111 S.E. 1st Street
Boca Raton, Florida 33432
E-mail: mail@kenwolfcommodities.com
Toll Free: 888.562.5300
Local: 561.962.4000
Fax: 561.962.4010

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