Provision of misleading information to the US National Futures Association (NFA) has cost introducing broker Hollencrest Securities $125,000.
The fine is related to a fabricated email, which led NFA to conduct an unnecessary seven-month investigation.
In March 2015, Nita Charlton-Gomes, controller and human resources manager at Hollencrest back then, contacted NFA’s registration department insisting that NFA had “erroneously” withdrawn the registration of Ayako Hanyu, an employee at Hollencrest, as an associated person (AP). Charlton-Gomes also asked that Hanyu be “reinstated…since this is an ERROR by the NFA, no fault of [Hanyu] or our firm.”
More importantly for the case in question, Charlton-Gomes also sent NFA a copy of an e-mail which she claimed she received on August 3, 2012 from an NFA employee by the name of Chris Collins (Collins) purportedly approving Hanyu’s AP registration with Hollencrest. This is the “Collins e-mail” that sparked the NFA investigation.
It was only several months later that Charlton-Gomes confessed she fabricated the e-mail.
Peter Pellizzon, a listed principal and associated person of Hollencrest and an NFA Associate, is held accountable for the wrongdoing.
In particular, there were two NFA rules violated:
- NFA Compliance Rule 2-2(f), which provides that no Member or Associate shall willfully submit materially false or misleading information to NFA or its agents.
- NFA Compliance Rule 2-9(a), which provides that each Member shall diligently supervise its employees and agents in the conduct of their commodity futures activities for or on behalf of the Member.
The Complaint authorized by NFA’s Business Conduct Committee (BCC) notes the disrespectful attitude towards NFA, which was also manifested in several e-mails Pellizzon and Charlton-Gomes exchanged. In these emails NFA is called “the worst agency”, NFA’s information center is labeled as “worthless” and Hanyu’s registration problems are attributed to “NFA’s stupidity.”
For the announcement from the NFA, click here.