,. ..... " ... ,~ ......
• .-ev.·~''-''
THE COMMODITY FUTURES ACT
Order No. 6546
co .......... ..
Section 27(1)
June 27, 2012
ROSENTHAL COLLINS GROUP LLC
WHEREAS:
(A)
On
June
25,
2012 ,
The
Manitoba
Securities
Commission
("Commission") issued a Notice of Hearing ("NOH") giving notice of its intention to
hold a hearing ("Proceedings") to consider whether it was in the pub lic interest to
grant an
order under
The
Commodity Futures Act ("Act")
wi th respect
to
Rosenthal Collins Group LLC ("Rosenthal Collins") :
(8)
Staff of the
Commission
and
the
respondent
entered
into
a
Settlement Agreement (a copy of which is attached as Schedule "A") dated June
4, 2012 ("Sett lement Agreemenl"), which proposed settlement of the Proceedings,
subject to the approval of the Commission;
(C)
The respondent has consented to the issuance of this Order and
has waived its rights to a fu ll hearing ;
(D)
On June 27, 2012 , the Commission held a hearing ("Settlement
Hearing ") to consider whether or not to approve the Settlement Agreement;
(E)
The Commission is of the opinion that it is in the public interest to
make this order.
IT IS ORDERED:
1.
THAT the Settlement Agreement, Schedule "A", be and the same is
hereby approved .
2.
THAT Rosenthal Collins will make a voluntary payment of $20.000
to the Treasurer of The Province of Manitoba.
8Y ORDER OF THE COMMISSION
jl()(lb/
Director
500·~OO Sl Mary Avcnuc, Winnipeg, M~ni(obll RlC 4KS • lei: (204) 'i-l5 254M
• fa ~: (204) 945 0))0 ' w"w. rll~q:oY.mb.r a
SCHEDULE "A"
•• e ... . T •••
co .. ..... . <I ..
IN THE MATTER OF:
THE COMMODITY FUTURES ACT, C.C.S.M. c. 152
-and-
IN THE MATTER OF:
ROSENTHAL COLLINS GROUP LLC
SETTLEMENT AGREEMENT
INTRODUCTION
1.
In
this Settlement Agreement ("Settlement Agreement") . staff of The
Manitoba Securities Commission ("Staff') and Rosenthal Collins Group
LLC ("Rosenthal Collins") wish to settle certain issues arising under The
Commodity Futures Act ("the Act") .
2.
Discussions have been held between Staff and Rosenthal Collins in an
effort to settle matters arising out of Rosenthal Coll ins trading in futures
contracts under the Act. A settlement has been reached on the terms set
forth in this Settlement Agreement.
3.
Staff agrees to recommend the terms set out in th is Settlement Agreement
for approval by The Manitoba Securities Commission ("Commission")
AGREED STATEMENT OF FACTS
4.
Rosenthal Co llins acknowledges the following facts as correct:
a)
Rosenthal Collins is registered with the US Commodity Futures
Trading Commission and is a member of the National Futures Association
as a futures commission merchant. Rosentha l Collins is also a clear ing
member on
several
United
States
futures exchanges, including
the
Chicago
Mercantile
Exchange . Chicago
Board
of Trade.
New York
Mercanti le
Exchange and
New York
Board
of Trade
as
well
as
a
registered
futures
commission
merchant
participant
of
ICE
Futures
Canada.
O· ..I OS nrO~dw~y. Wiull ipeg, Manitoba R3C 3L6 tel: (204) 945.2548 fa ,,':: (204) 945.0]]0 www.m5c.gov.m b.c;l
2
b)
Rosenthat Collins' head office is located in Chicago, Illinois and all
of
Rosenthal
Collins
principal
operations,
employees ,
contractors,
activities , books and records are located in the United States. Rosenthal
Collins conducts business with institutional and individual retail clients as
well as providing futures, clearing and execution services to introducing
brokers, broker-dealers and other future commission merchants.
c)
As of the date hereof, Rosenthal Collins has not advertised to or
solicited residents of the Province of Manitoba .
d)
Rosenthal Collins is not registered in any capacity under the Act.
e)
As a result of inquiries made by Staff, Rosenthal Col lins advises
that
in
June, 2010
it
had
29 open accounts with Manitoba residents
(collectively described in this agreement as the "Manitoba accounts"). Of
the 29 open Manitoba accounts,
(i) 27 accounts were introduced or transferred, to Rosenthal
Collins by various registered introducing brokers or future
commission merchants located in the U .S.
(ii) one account was transferred to Rosenthal Collins by a
nOW defunct firm in the U.S. and
(iii) one account was opened at Rosenthal Coll ins unsolicited
by Rosenthal Collins.
f)
As of February 15, 2012 Rosenthal Collins represents it had 20
open accounts for residents of Manitoba that do not qualify as hedgers as
that term is defined under the Act. ("non hedging account").
g)
With the exception of two hedger (as that term is defined in the Act)
accounts all trades in the Manitoba accounts have been conducted on
U.S. Futu res Exchanges of which Rosenthal Collins is a full clearing
member.
h)
Rosenthal Collins has traded 'in exchange traded futures listed on
ICE Futures Canada on behalf of two hedgers resident in Manitoba .
i)
As
a
result of correspondence
received
from
Staff, Rosenthal
Collins had sought to close all non hedging accounts forthwith . Rosenthal
Collins
represents
the
trading
activity
in
the
two
remaining
hedging
accounts will be conducted in compliance with the exemption set forth in
section 34(a) of the Act.
j)
Rosenthal Collins acknowledges it has engaged in unreg istered
trad ing through the opening
and
operation of exchange trade futures
accounts
with
residents
of
Manitoba .
Further,
Rosenthal
Collins
3
acknowledges It did not. prior to January 1, 2012, file Form 18s for trades
in the hedger accounts as required by s. 34(a) of the Act and MSC Rule
2000-11.
MITIGATING FACTORS
5,
Rosenthal Collins represents Ihere has not been any complaints by
Rosenthal
Coll ins'
customers
resident
in
Manitoba
concerning
their
accounts or trading in their accounts.
6.
Rosenthal Collins represents it has stopped opening accounts in Manitoba
as a result of regulatory inquiries and will continue to preclude the opening
of accounts with residents of Manitoba unless Rosenthal Collins becomes
registered under the Act or alternatively the opening of accounts would be
in
compliance
with
an
applicable
exemption
from
the
registration
requ irements of the Act.
7.
Rosenthal Coll ins has cooperated fu lly wi th Staff's investigation of the
matters referred to herein including respond ing to Information requests by
Staff.
8.
Rosenthal Coll ins has no offices or employees in Manitoba, and as of the
date hereof, has not advertised or otherwise directly solicited customers in
Manitoba.
UNDERTAKING
9.
Rosenthal Collins undertakes and agrees as fo llows:
a)
To make a voluntary payment to the Province of Manitoba in the
sum of $20,000 upon approval of this Settlement Agreement.
b)
Not
to
open
any
accounts
with
Manitoba
residents
unless
it
becomes registered under the Act or an exemption is available under the
Act or granted by the Commission .
TERMS OF SETTLEMENT
10.
Staff seeks a consent order from the Commission consistent wi th the
terms set out in paragraph 9 of the Settlement Agreement.
11 ,
The consent order sought by staff is as follows:
4
a)
That the Settlement Agreement be approved ; and upon approval of
this settlement Rosenthal
Collins will
make a voluntary payment of
$20,000 to the Treasurer of the Province of Man itoba.
PROCEDURE
12,
The approval of this Settlement Agreement shall be sought at a public
hearing.
13,
If this Settlement Agreement is approved by the Commission , and if a
Consent Order issues in accordance with this Settlement Agreement , this
Settlement Agreement will constitute the entirety of the evidence to be
submitted to the Commission in connection with the Proceed ings and ,
upon the making of the order contemp lated by this Settlement Agreement,
Rosenthal Collins waives its right to a full hearing and appeal of this
matter.
14.
Notwithstanding any other provision of this Settlement Agreement, if, for
any reason whatsoever, this Settlement Agreement is not approved by the
Commission or the Consent Order referred to in paragraph 11 above is
not
made
by
the
Commission , Staff will
be
entitled
to
proceed
with
whatever steps it is entitled by law to take unaffected by this Settlement
Agreement or the settlement discussions, In the event that such steps are
taken , Rosenthal Collins shall have all of the usua l rights of a person
subject to such proceedings .
15
If the Settlement Agreement is not approved or the Consent Order set out
in paragraph 11 above is not made by the Commission, the terms of this
Settlement Agreement shall remain confidential and shall not be raised in
this
or
any other proceeding, and
any admissions contained
in
this
Settlement
Agreement
shall
be
considered
as
without
prejudice
communications and furtherance of settlement discussions which wi ll not
be binding upon
the parties and
which will
be inadmissible in
any
proceeding whatsoever.
16.
If this Settlement Agreement is approved by the Commission and the
Consent Order made upon the terms set out in this Settlement Agreement,
this Settlement Agreement will be a public document.
17,
Rosenthal Collins agrees that, if this Settlement Agreement is approved by
the Commission and the Consent Order is made upon the terms set out in
this Settlement Agreement, Rosenthal Collins will not raise as a basis for
attack on
the Order this
Settlement Agreement or the
negotiation or
process of approval of this Settlement Agreement , alleged bias , alleged
unfa irness, or any such other challenges to the validity of the Consent
Order.
18.
Rosenthal Coli ins further agrees , that if th is Settlement Agreement is
approved by the Commission and the Consent Order is made upon the
terms
set out in this
Settlement.
statements inconsistent with the terms of this Agreement.
DATED at Winnipeg , Manitoba thiS.2!:... day of J;;,~
DATED at ~\l.re :<,;1m
, ~Q(l
. this liday of _l\'l\Q:la""u,+-_, 2012.
')
5
Agreement,
it
wi ll not
make
any
, 2012.
Dire to , Lega l and Enforcement
\?i
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.