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Tennessee Firm, 6 People to Pay Record $2.22 Million Settlement

November 3, 1993

WASHINGTON (AP) _ A Memphis, Tenn., futures trading firm and six of its employees will pay a record $2.22 million to settle charges they violated federal futures trading laws and then tried to cover up their activities.

In an administrative complaint, the Commodity Futures Trading Commission accused McVean Trading & Investments Inc. and the six individuals on Tuesday of violating commodity exchange limits on how many contracts a speculator can trade at one time.

Without admitting or denying wrongdoing, the firm and six defendants, including Charles Dow McVean, the firm’s president and majority shareholder, agreed to pay fines ranging from $875,000 to $10,000.

It was the largest fine ever imposed for a speculative limit violation, said the CFTC, the futures industry regulator.

The agency accused the firm and several defendants of violating speculative position limits for cattle futures contracts traded on the Chicago Mercantile Exchange.

″This was not a fraud case. No customers lost money. But we are talking about the integrity of the market and the commission’s role in monitoring the market,″ said Dennis Klejna, head of the CFTC’s Enforcement Division.

In a written statement, the firm said that newly expanded limits on speculative positions means the issue won’t affect its trading operations. The statement said the firm admitted no wrongdoing and decided to settle the dispute because of the time and expense involved in mounting a defense.

The CFTC also alleged that between January 1990 and December 1991 most of the defendants regularly filed false reports with the agency to conceal the speculative limit violations - in effect, tampering with the agency’s ability to oversee the market.

The firm and McVean, each were fined $875,000. Also settling with the CFTC were: Michael Joseph Wharton, F. William Nicholson, and Llewellyn Connell Hall, all of Memphis; David Earl Williams, of Cordova, Tenn., and Paul Frank Plescher of Germantown, Tenn.

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