Commodity Firm Charged With Running Up Commissions
CHICAGO (AP) _ Murlas Commodities Inc., a commodity trading company, was charged Monday by a federal agency with running up excessive commission fees while buying and selling commodity futures for its customers.
Murlas was named in a two-count administrative complaint by the Commodity Futures Trading Commission.
The 10-year-old company has about 1,000 accounts with more than $4 million in customer funds, according to the commission, the federal agency that regulates the futures trading industry. Murlas has branch offices in 24 cities from coast to coast.
The agency charged the company with ″churning,″ the practice of making an excessive number of trades to generate commission fees for the company at the expense of the customer.
Dennis Klejna, director of the commodity agency’s division of enforcement, declined to say how much money was involved. He also would not say which commodities Murlas was trading, although the company is a member of the Kansas City Board of Trade, where wheat and stock index futures are traded.
Jeff Johnson, general manager of the Chicago office of Murlas, said the company had not seen the complaint and could not comment.
Jim Johnson, vice president for compliance with the Kansas City Board of Trade, said the exchange had taken no disciplinary action against Murlas and declined further comment.
But the National Futures Association, the industry’s self-regulatory agency, has begun disciplinary proceedings against Murlas, also charging churning. The NFA said Monday that the company could be barred from commodity trading as a result of the action.
The NFA action is not related to the commodity commission action, but stems from some of the same trading activities, said Laura M. Oatney, a spokeswoman for the Chicago-based NFA.
The NFA also charged Murlas with lying to customers about the performance of some of Murlas’ accounts, and about the risks involved in trading commodity futures.
Also charged by the commodity commission were the three owners of Murlas: Leroy H. Gordon of Glenview, Ill., president; Rodger Mitchell of Willmette, Ill., vice president; Paul Kvistad, of Schaumburg, also a vice president. Each of the men owns 33 percent of the company’s stock, the commission said.
The complaint also named Charles Konkus of Barrington Hills, Ill., identified as the former general manager.
Murlas and the individuals named in the complaint could each be fined up to $100,000 and their registration with the commission could be revoked.