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Do you remember June 9, 1999? That was the day Bobby Valentine was ejected from a baseball game between the Toronto Blue Jays and the New York Mets for arguing a catcher's interference call on Mike Piazza. Rather that leave quietly into the clubhouse, Bobby Valentine surreptitiously re-appeared in the dugout, wearing both sunglasses and a moustache to supervise the remainder of the game. Major League Baseball was not amused, and Bobby Valentine was later fined and suspended for two days. (If you don't remember this incident, feel free to check the link of the video below.)
What does this all have to do with futures regulation?
Last week the US Commodity Futures Trading Commission announced the filing of a Complaint and Consent Order against Michael Peskin in a Chicago Federal court related to Mr. Peskin's modern day reincarnation of the Bobby Valentine moustache disguise incident in connection with his futures trading activity.
This matter had its genesis in Mr. Peskin's prohibition from trading on all US futures exchanges and other sanctions following an Administrative Law Judge's finding in 1992 in an action commenced by the CFTC. There the ALJ held that Mr. Peskin knowingly defrauded and cheated public customers by fraudulently allocating futures trades and entering orders initially without account identification.
Like Bobby Valentine, Mr. Peskin could not stay in the clubhouse as he was required. According to the CFTC, beginning in 2006 Mr. Peskin started trading futures and options in violation of his 1992 sanctions through a friend's accounts at two future commission merchants. Unfortunately for Mr. Peskin, this disguise did not escape the scrutiny of the CFTC's Division of Enforcement.
In response, based on the CFTC's current Complaint, and Mr. Peskin's consent, Mr. Peskin was required by the Court permanently to stop violating the relevant law; disgorge all profits he made through his illicit trading activities ($239,000); pay a fine of $250,000; and not trade directly or indirectly futures, options, security futures products, swaps or foreign currency for his own or anyone else's account forever.
The Court did not, however, prohibit Mr. Peskin from donning a moustache.
Oh, by the way, the Mets won the relevant game 4-3 in 14 innings.
For more information, see:
CFTC v. Peskin:
http://www.cftc.gov/ucm/groups/public/@lrenforcementactions/documents/legalpleading/enfpeskinorder072413.pdf
MLB --Bobby Valentine Moustache Incident:
http://wapc.mlb.com/play/?content_id=8852885
The information contained in this article is not legal advice. For legal advice, please consult with your attorney. The information in this article is derived from sources believed to be reliable as of July 31, 2013, but no representation or warranty is made regarding the accuracy of any statement. To ensure compliance with requirements imposed by U.S. Treasury Regulations, Gary DeWaal and Associates LLC informs you that any U.S. tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Gary DeWaal and Associates may represent one or more entities mentioned in this article.
Gary DeWaal is currently Special Counsel with Katten Muchin Rosenman LLP in its New York office.
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September 17, 2014
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Gary DeWaal
Katten Muchin Rosenman
575 Madison Avenue
New York 10022-2585
1 (212) 940-6558
Bobby Valentine, the 1999 Moustache Incident, and a Current US CFTC Division of Enforcement Action: Deja Vu All Over Again?
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