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Wednesday, November 5, 2014

CFTC ANNOUNCES COURT PERMANENT BAN FROM TRADING AND REGISTRATION ON N.C. MAN

FROM:  COMMODITY FUTURES TRADING COMMISSION 
Federal Court Permanently Bans North Carolina Resident Neal Hall from Trading and Registration and Imposes a $210,000 Penalty for Violating the CFTC’s Registration and Consumer Notice Provisions

Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today announced that the Honorable James A. Beaty, Jr. of the U.S. District Court for the Middle District of North Carolina entered an Order imposing permanent trading and registration bans and a $210,000 civil monetary penalty against Defendant Neal E. Hall of Reidsville, North Carolina for registration violations and failure to include certain required disclosures on his website.

The Order entered on October 6, 2014, follows a Memorandum Opinion entered by the court on November 21, 2013, both of which stem from a civil enforcement action filed by the CFTC against Hall on May 31, 2011 (see CFTC Press Release 6049-11).  The CFTC Complaint charged that, starting no later than June 2010 and continuing to June 2011, Hall used the mails and other avenues of interstate commerce while offering his services as a Commodity Trading Advisor (CTA) in exchange for payment in the form of either flat charges or a percentage of profits from customers.

The court found that Hall used his website to solicit clients both to subscribe to his e-mini S&P 500 futures trading program and to have him manage their trading accounts, and, as a result, Hall violated the Commodity Exchange Act, by failing to register with the CFTC as a CTA.

Additionally, the court found that Hall violated CFTC Regulations 4.41(a)(3) and (b).  Those Regulations require cautionary statements to accompany the use of client testimonials and the presentation of the performance of a simulated or hypothetical commodities account.  Regulation 4.41(b) further dictates that the cautionary statement accompanying the presentation of the performance of simulated or hypothetical trading results contain specific language and be prominently displayed in immediate proximity to the hypothetical results.

The court found that Hall violated Regulation 4.41(a)(3) because his website lacked a cautionary statement despite featuring testimonials from unnamed clients.  Similarly, the court found that Hall violated Regulation 4.41(b) because his website did not contain a disclaimer with the specific language required by the Regulation that is prominently displayed in immediate proximity to the hypothetical trading results.

The CFTC appreciates the assistance of the North Carolina Securities Division and the Office of the U.S. Attorney for the Middle District of North Carolina.

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