0015550 MURPHY, WILLIAM JOSEPH III • FINE $275000
• TRADING PRIVILEGES SUSPENDED 10 YRS
• MAY NOT APPLY TO REGISTER
• COMPLAINT FILED
• AP REGISTRATION REVOKED
0015550 MURPHY, WILLIAM JOSEPH III • CEA 4b(A) - CHEATING OR DEFRAUDING
• CEA 4b(D) - BUCKETING OR OFFSETTING ORDERS
• CEA 4c(a)(A) - WASH SALE, CROSS TRADE, FICTITIOUS SALE, ACCOM TR
• CEA 4c(a)(B) - REPORTING NON BONA-FIDE PRICES
• CEA 4c(b) - ILLEGAL TRADING OF COMMODITY OPTIONS
• CEA 4g(1) - FAILURE TO KEEP PROPER BOOKS AND RECORDS
• CEA 4i - REPORTS OF TRANSACTIONS EXCEEDING LIMITS
• CEA 6(b) - FALSE REPORTING; VIOLATION OF A C&D
• CFTC1.31 - BOOKS/RECORDS: KEEPING/INSPECTION
• CFTC1.35(a) - FCMS AND IBS TO KEEP BOOKS & RECS
• CFTC1.35(a-1) - ORDERS TO BE TIME STAMPED & NUMB
• CFTC1.38(a) - NONCOMPETITIVE TRADING
• CFTC155.3(b)(2) - TAKING OPPOSITE SIDE OF A CUSTOMER ORDER
• CFTC166.2 - AUTHORIZATION TO TRADE REQUIRED
• CFTC17.00(b) - REPORTING INTEREST/CONTROL OF ACCOUNTS
• CFTC17.01(b)(8) - IDENTIFICATION OF SPECIAL ACCOUNTS
• CFTC17.01(d) - UPDATING FORM 102
• CFTC18.01 - INTEREST/CONTROL OF SEVERAL ACCOUNTS
• CFTC18.04 - STATEMENT OF REPORTING TRADER
• CFTC33.10 - FRAUD RE COMMODITY OPTIONS
Release: 3530-92 July 30, 1992
WASHINGTON -- The Commodity Futures Trading Commission announced today the filing of a 13-count administrative complaint against Trading Resources, Inc. (TRI), of New York, New York, and three brothers who own and control the firm, William J. Murphy III of Bernardsville, New Jersey, Timothy R. Murphy of Upper Montclair, New Jersey, and Michael P. Murphy of Verona, New Jersey. The complaint charges the respondents with noncompetitive trading and fraud in the trading of copper futures and options contracts on the Commodity Exchange (COMEX) for proprietary and discretionary customer accounts of TRI during the period from October 1987 through February 1988.
TRI is currently registered with the Commission as a futures commission merchant and a commodity pool operator (CPO). William J. Murphy III is registered as an associated person (AP) of TRI and Bernardsville Associates, Inc., a commodity trading advisor (CTA) and CPO. Timothy R. Murphy is registered as an AP of TRI and as a CTA. Michael Murphy was registered as an AP of TRI from April 15, 1988, until December 1, 1989, and is presently registered as an AP of Iron Horse Trading, Inc., an introducing broker, and of Weston Asset Management, Inc., a CPO.
The complaint alleges that, on at least 192 occasions, after transmitting matching buy and sell orders to one or more floor brokers on the COMEX, TRI and the Murphy brothers fraudulently allocated the resulting purchases and sales between proprietary and discretionary customer accounts carried by the firm. The complaint also alleges that in at least 75 of these transactions, the respondents took the opposite side of customer orders, without the customers' consent.
In addition, the complaint charges that, by simultaneously sending matching buy and sell orders to be crossed against each other to the same floor broker, TRI and the Murphy brothers engaged in noncompetitive trading, which resulted in illegal wash sales and fictitious sales and caused non-bona fide prices to be reported.
Finally, throughout the time period covered by the complaint, TRI and the Murphy brothers are charged with failing to comply with applicable recordkeeping and reporting requirements established by the Commission.
A public hearing has been ordered to determine whether the allegations are true, and, if so, what sanctions, if any, should be imposed.
For Release: February 18, 1993
CFTC SETTLES 13-COUNT FRAUD CASE AGAINST TRADING RESOURCES INC. AND ITS THREE PRINCIPALS; RESPONDENTS FINED $650,000
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that it has accepted settlement offers arising from a 13-count CFTC
administrative complaint filed on July 30, 1992, against Trading Resources, Inc. (TRI) of New York, New York, registered with the CFTC as a futures commission merchant and a commodity pool operator, and against the three brothers who own and control the firm, William J. Murphy III of West Paterson, New Jersey, Timothy R. Murphy of Upper Montclair, New Jersey, and Michael P. Murphy of Verona, New Jersey.
The complaint charged the respondents with noncompetitive trading and fraud in the trading of copper futures and options contracts on the Commodity Exchange, Inc. for proprietary and discretionary customer accounts of TRI during the period from October 1987 through February 1988 (CFTC News Release #3530-92). The Murphys were also charged with violating CFTC regulations against noncompetitive trading and causing non-bona fide prices to be reported. In addition, W. Murphy, T. Murphy, and TRI were alleged, among other things, to have filed false reports which failed to disclose their financial interests in Crescent Trading Ltd., an Isle of Man corporation. The complaint charged that Crescent was used, among other purposes, by the Murphys to trade opposite customer accounts.
The CFTC received substantial assistance in the investigation from the United Kingdom Department of Trade and Industry through the Memorandum of Understanding signed in September 1991. This assistance was crucial to the successful outcome of the case.
Settlement Order Sets Fines and Registration Prohibitions
Without admitting or denying the allegations in the complaint, the Murphys and TRI consented to the entry of a CFTC order finding that they violated the anti-fraud provisions of the Commodity Exchange Act, directing them to cease and desist from further such violations, revoking the Murphys' and TRI's registrations with the CFTC, and prohibiting them from applying for registration with the Commission in the future. The order also prohibits the respondents from trading on, or subject to the rules of, any contract market, as follows: William J. Murphy III for 10 years, Timothy R. Murphy for 10 years, Michael P. Murphy for 5 years, and TRI forever. Finally, the order directs the Murphys to each pay the following civil monetary penalties: William J. Murphy III $275,000, Timothy R. Murphy $275,000, and Michael P. Murphy $100,000.