Broker Takes Fight Against Industry Ban to the Supreme Court

Broker Takes Fight Against Industry Ban to the Supreme Court

Lawrence Fejokwu and his company, Chazon QTA Quantitative Trading Artists LLC, was banned from National Futures Association (NFA) membership after Fejokwu refused to help with its investigation. The U.S. Commodity Futures Trading Commission (CFTC) agreed with the NFA, and the Third Circuit ruled that the CFTC didn’t abuse its discretion in sustaining the ban. Now, Fejokwu has filed a Petition for Writ of Certiorari with the U.S. Supreme Court.

In his Petition, Fejokwu, who is pro se, raises three essential matters:

  1. Whether “willfulness” allows for a reasonable good-faith defense.
  2. Whether the CFTC can delegate certain authority to the NFA.
  3. Whether the NFA followed appropriate due-process.

Fejokwu summed up his case with the following question:

“Will the NFA empowered by the rubber-stamp of the CFTC, and the acquiescence and imprimatur of federal courts in the name of “agency deference” be allowed to continue to function as a supreme power unto itself – by using its Rule 2-5 “Failure to Cooperate”, as a catchall, omnipotent, limitless weapon to target and destroy parties the NFA simply does not like or wants out of their club, without any pretense of due-process, fairness, or justice? Is the NFA the Supreme Court of the United States of America or is this Court, the Supreme Court of the United States of America?”

The Supreme Court has yet to decide to hear the case.

About Kennyhertz Perry’s Commodities, Futures, and Derivatives Practice Group

Kennyhertz Perry advises clients on a wide range of commodities and derivatives regulatory matters.  Kennyhertz Perry has experience in all types of derivative transactions and design structures to meet clients’ specific trading, financial, and/or credit needs.  The roots of the practice are in the commodities markets, where Kennyhertz Perry partner Braden Perry spent time as a Senior Trial Attorney with the Commodity Futures Trading Commission.  Our lawyers regularly advise our clients on compliance with the complex laws and regulations governing the securities and derivatives industries, including the Commodity Futures Modernization Act of 2000, the Commodity Exchange Act, the Gramm-Leach-Bliley Act, the Securities Acts of 1933 and 1934, the Investment Company Act of 1940, the Investment Advisers Act of 1940, the SEC and CFTC regulations, the rules of the various derivatives exchanges and clearinghouses and other industry self-regulatory organizations and the “Blue Sky” state securities laws. Keeping abreast of regulatory developments is imperative, and enables our lawyers to guide clients on comment-making about proposed legislation and regulation, provide ongoing operational and compliance counseling, and offer advice on appropriate modifications of transaction structure and documentation.

Clients also benefit from Kennyhertz Perry’s experience in related areas of law, such as litigation, banking, securities, insurance, and its regular practice before the Commodity Futures Trading Commission. Leaders in the financial industry choose Kennyhertz Perry because the firm’s lawyers tailor their advice to the unique issues presented by each matter they handle.

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