Regulator Moves To Eject First Commodity
BOSTON (AP) _ The National Futures Association has moved to expel First Commodity Corp. of Boston for alleged fraud, an action which could prohibit the company from selling commodity futures to the public.
Lawyers for the association, a federally-approved regulatory group, notified First Commodity on Thursday that they will seek to revoke the company’s membership.
″It will put them out of business,″ said Robert K. Wilmouth, president of NFA.
The move comes two weeks after the MidAmerica Commodity Exchange ejected First Commodity for what an exchange official said was ″the systematic practice of fraud and deceit.″
The exchange also fined First Commodity and two executives $3.585 million.
MidAmerica was the only exchange to which First Commodity belonged, but the company could continue operating by funneling trades through other companies.
First Commodity is appealing its expulsion from Mid America and said it would appeal the NFA action.
The action by NFA lawyers is the first step in a process that could take up to two months, its officials said. The appeal could take an additional six months or longer, and the company can continue doing business until the appeal is complete.