**Release: #4179-98 (CFTC Docket Nos. 98-15 and
    98-16)****For Release: August 17, 1998**

**CFTC FILES ENFORCEMENT ACTION ALLEGING FRAUD,
    REGISTRATION AND REGULATORY VIOLATIONS BY INTERNATIONAL FUTURES
    CORPORATION, AN INTRODUCING BROKER IN WASHINGTON, D.C., AS WELL AS FAILURE
    TO SUPERVISE DILIGENTLY BY ITS FUTURES COMMISSION MERCHANT, LIT DIVISION OF
    FIRST OPTIONS OF CHICAGO**

**Complaint Charges that Introducing Broker
    Committed Fraud in Soliciting Managed Account Trading Program and Acted as
    Unregistered Commodity Trading Advisor, and That Futures Commission
    Merchant Failed to Supervise Diligently the Activities of its Guaranteed
    Introducing Broker**

WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced
    today the filing of a five-count administrative complaint alleging that
    **International Futures Corporation (IFC)**, a registered
    introducing broker (IB) located in Washington, D.C., violated the
    anti-fraud provisions of the Commodity Exchange Act (CEA) and CFTC
    Regulations by fraudulently soliciting clients to trade its "Hermes"
    managed account program, a computerized S&P 500 day trading program.
    The complaint further alleges that in soliciting and trading the Hermes
    program, IFC acted as an unregistered commodity trading advisor (CTA) in
    violation of the CEA and also violated several CFTC Regulations governing
    the conduct of CTAs. In addition, the complaint alleges that **LIT
    Division of First Options of Chicago (LIT)**, a registered futures
    commission merchant located in Chicago, Illinois, which guaranteed IFC, is
    liable for IFC's statutory and regulatory violations and that LIT also
    failed to supervise diligently its guaranteed IB, IFC, as required by CFTC
    Regulation 166.3. The CFTC also announced today that it issued an order
    instituting administrative proceedings against **Robert J.
    Rubel**, IFC's former Chief Executive Officer and President, and
    that simultaneous with the filing of this administrative proceeding, it
    accepted Rubel's offer of settlement. Rubel is registered with the CFTC as
    an AP of IFC and also as a CTA under the name of Robert J. Rubel, C.T.A.
    d/b/a Mt. Olympus Trading.

More specifically, the CFTC complaint alleges that IFC fraudulently
    portrayed the Hermes trading program as an established, time-tested trading
    program that had achieved phenomenal results for customers over a period of
    years. According to the CFTC complaint, IFC misrepresented in its radio
    advertisements, written promotional material, and oral representations to
    prospective clients that the Hermes program had between three and eight
    years of actual performance results when, in fact, all the performance
    results provided were hypothetical. The complaint further alleges that IFC
    falsely asserted that all or a substantial number of IFC brokers had
    invested in the Hermes program.

The CFTC charges that IFC acted as a CTA in soliciting clients to trade,
    and in trading, its Hermes managed account program, but that IFC failed to
    register as a CTA as required by the CEA. The complaint further charges IFC
    with violating CFTC Regulations that require a CTA to deliver a Disclosure
    Document for its trading program to prospective clients, file a Disclosure
    Document for its trading program with the CFTC, and keep the originals or
    copies of promotional materials (including advertisements) for a period of
    five years. The nearly 40 IFC clients that traded the Hermes program lost
    approximately $400,000.

According to the CFTC complaint, LIT guaranteed IFC from December 1993
    until July 1997. The complaint alleges that LIT is liable for the fraud,
    registration and regulatory violations committed by its agent, IFC. The
    complaint further alleges that LIT approved certain of IFC's fraudulent
    radio advertisements and written promotional material regarding the Hermes
    program. The complaint charges that LIT failed to supervise diligently the
    activities of its guaranteed IB, IFC, in violation of CFTC Regulation
    166.3.

The CFTC order as to Rubel, based on the settlement, finds that he
    violated the anti-fraud provisions of the CEA and CFTC Regulations by
    fraudulently soliciting clients to trade IFC's Hermes program in radio
    advertisements, written promotional literature, and oral representations.
    The order further finds that Rubel aided and abetted the IB's fraud,
    registration, and regulatory violations, and that Rubel also is liable for
    those violations as a controlling person of the company.

Rubel, without admitting or denying the findings, consented to the entry
    of the order:

-- directing him to cease and desist from further violations;

-- revoking his registrations;

-- imposing a five-year trading ban; and

-- directing him to pay a $15,000 civil monetary penalty.

According to the order, the CFTC believes that a more substantial
    monetary sanction would have been appropriate but for Rubel's showing of
    his financial condition.

The CFTC's complaint against IFC and LIT institutes a public
    administrative proceeding to determine if the allegations in the complaint
    are true and, if so, whether sanctions should be imposed.