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CFTC fines futures broker over customer order supervision flaws

Jan 03 2013 Stuart Gittleman, Compliance Complete

The Commodity Futures Trading Commission on Wednesday sanctioned R.J. O'Brien & Associates, LLC for failing to diligently supervise its employees' handling of commodity futures orders that enabled two customers to perpetrate an unlawful trade allocation scheme. Without admitting or denying the CFTC's findings, the firm, a Chicago-based FCM, or futures commission merchant, that calls itself the "oldest and largest independent futures brokerage and clearing firm" in the United States, consented to being fined $300,000 and ordered to cease and desist from future violations. The CFTC found that from at least January 2003 through February 2007 the firm violated CFTC Regulation 166.3 by failing to diligently supervise transactions involving two customers, a guaranteed introducing broker, or "GIB," and its associated person, sole principal and owner. A GIB is an introducing broker that has no minimum capital or financial reporting requirements and whose operations are guaranteed by a

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