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CFTC charges three with destroying records and failing to supervise staff

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The US Commodity Futures Trading Commission has filed an enforcement action charging Chicago-based New World Holdings with destroying business records and failing to diligently supervise employees.

New World Holdings is a registered introducing broker and commodity trading adviser. 

The firm’s principal Steven David Erdman and its branch manager Grace Elizabeth Reisinger are charged with aiding and abetting New World Holdings’ failure to keep proper business records. Erdman is also charged with failing to diligently supervise employees.

The CFTC complaint, filed in the US District Court for the Northern District of Illinois, alleges that, from at least 10 March 2006 to 1 April 2009, New World Holdings failed to maintain books and records as required by the Commodity Exchange Act and CFTC regulations. 

Specifically, Reisinger and her supervisor Erdman aided and abetted New World Holdings’ violations by knowingly falsifying and destroying records, the complaint charges.

In sworn testimony before the CFTC, Erdman and Reisinger admitted knowing that purported proprietary trading accounts were actually funded by a number of undisclosed third parties in Australia and elsewhere and further admitted that they should have never introduced these accounts to the futures commission merchant as proprietary accounts, according to the complaint.

Furthermore, Erdman, as Reisinger’s supervisor, failed to diligently supervise her, and New World Holdings failed to diligently supervise its associated persons and employees, the complaint alleges. 

In its continuing litigation, the CFTC seeks disgorgement of ill-gotten gains, civil monetary penalties and a permanent injunction against further violations of federal commodities law.

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