Release: #4171-98

For Release: July 23,
    1998

CFTC FILES CIVIL ANTI-FRAUD
    ACTION AGAINST THOMAS EDWARD KELLY, ANDREW DAVID RHEE AND REFLEX ASSET
    MANAGEMENT CORPORATION

CFTC Charges the Defendants with
    Fraud for Trading Commodity Futures Contracts Ahead of Kelly's Employer,
    John W. Henry & Co.; U.S. Attorney Files Parallel Criminal Information
    Arising from Cooperative Investigation

WASHINGTON - The Commodity Futures
    Trading Commission (CFTC) announced the filing of a two-count civil
    complaint on July 23, 1998, in the U.S. District Court for the Southern
    District of New York against Thomas Edward Kelly, of Boca Raton,
    Florida; Andrew David Rhee, of Miami Beach, Florida; and Reflex
    Asset Management Corporation (Reflex), located in Miami Beach,
    Florida.

Reflex is registered with the CFTC
    as a commodity pool operator and a commodity trading advisor. Rhee is
    registered as an associated person of Reflex and is the president, sole
    principal, and owner of Reflex. Kelly is not registered with the
    CFTC.

The filing of the CFTC complaint,
    alleging violations of the anti-fraud provisions of the Commodity Exchange
    Act (CEA), follows a cooperative investigative effort by the CFTC, the U.S.
    Attorney for the Southern District of New York, and the U.S. Postal
    Inspection Service.

The CFTC's complaint alleges that
    since 1995 Kelly, Rhee, and Reflex cheated, defrauded and willfully
    deceived Kelly's employer, John W. Henry and Co. (JWH), a registered
    commodity trading advisor and commodity pool operator. Specifically, the
    complaint alleges that Kelly stole material confidential non-public
    proprietary information concerning JWH's planned commodity futures trades
    and provided that information to Rhee. The complaint further alleges that
    often the positions taken by JWH in the futures markets are sufficiently
    large to have a short-term effect on the prices at which such commodity
    futures contracts are traded on CFTC-regulated futures exchanges. Using the
    stolen information, Rhee placed trades ahead of JWH's commodity futures
    trades and reaped profits of more than $2.5 million for himself, Reflex,
    and Kelly from the resulting market movement, the complaint
    alleges.

In addition, the complaint alleges
    that Rhee created a commodity futures trading performance record for
    himself and Reflex that he used to solicit new customers and retain
    existing customers, but he failed to reveal to these customers the material
    fact that the trading success reflected in that trading record was based
    upon the confidential information Kelly stole from JWH.

The CFTC seeks a permanent
    injunction against the defendants prohibiting them from violating
    provisions of federal commodity law as charged, disgorgement of all the
    defendants' ill-gotten gains, and civil monetary penalties against each
    defendant in amounts not to exceed the higher of $110,000 or triple the
    monetary gain to them for each violation of the CEA, in addition to other
    equitable relief as the court may deem appropriate.

Geoffrey Aronow, the Director of
    the CFTC's Division of Enforcement, stated the following about the
    Commission's action:

"Misappropriation of
      confidential information about a commodity pool's planned trades can harm
      the commodity pool, its customers, and others by moving the market
      adversely to the interest of the pool. This action demonstrates the
      Commission's commitment to act to protect customer confidence and market
      integrity."


On the same day that the CFTC's
    complaint was filed, the U.S. Attorney filed a criminal information against
    Rhee and Kelly concerning these same matters. Mr. Aronow expressed his
    appreciation to the U.S. Attorney and the U.S. Postal Inspection Service
    for their assistance in the investigation. Aronow also expressed his
    appreciation to John W. Henry & Co. for its cooperation throughout the
    investigation.

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