Release: 4023-97 (CFTC Docket #97-8)

For Release: May 20, 1997

CFTC FILES ENFORCEMENT ACTION CHARGING KEVIN A. MARSHBURN OF ORLANDO,
    FLORIDA, WITH FRAUDULENT TRADE ALLOCATION AND PRUDENTIAL SECURITIES WITH
    FAILURE TO SUPERVISE DILIGENTLY AND WITH RECORDKEEPING VIOLATIONS

Kathleen Chiappone and Kathryn Sarabasa Are Also Charged in the
    CFTC's Complaint

WASHINGTON -- The Commodity Futures Trading Commission (CFTC) today
    announced the filing of a four-count administrative complaint against Kevin A. Marshburn of Orlando, Florida; Prudential, Securities,
    Inc. (Prudential) of New York, New York; Kathleen
    Chiappone of Winter Park, Florida; and Kathryn Sarabasa of
    Winter Springs, Florida.

The CFTC complaint charges that Marshburn violated the Commodity
    Exchange Act (CEA) by cheating, defrauding, and deceiving customers in
    connection with his handling of commodity futures accounts trading frozen
    concentrated orange juice futures contracts on the Citrus Associates of the
    New York Cotton Exchange from May 1993 through March 1994, while employed
    at the Orlando, Florida, office of Prudential Securities, Inc. Marshburn
    was registered with the CFTC as an Associated Person (AP) of Prudential at
    the time of the alleged violations.

Specifically, the CFTC complaint charges Marshburn with fraudulently
    allocating trades between his personal futures account and customer
    accounts. The complaint alleges that he gave himself profitable round-turn
    trades or better prices on specific trades, while giving customers losing
    trades or worse prices on specific trades. Marshburn is also charged with
    violations of the CEA and CFTC regulations involving order preparation and
    recordkeeping, including failure to record account identification on
    customer orders and failure to retain required records.

CFTC Charges Prudential With Failure to Supervise Diligently and With
    Recordkeeping Violations

The complaint alleges that Prudential violated the CEA and CFTC
    regulations by failing to supervise Marshburn diligently while he was
    employed at Prudential, and by failing to prepare properly, to retain, and
    to produce certain required records. Specifically, Prudential is charged
    with failing to establish a supervisory and compliance structure reasonably
    designed to detect and deter possible fraudulent trade allocation schemes
    involving an AP's personal futures trading account.

Marshburn, Chiappone, and Sarabasa are charged with aiding and abetting
    Prudential's alleged recordkeeping violations. Chiappone and Sarabasa, who
    were also registered with the CFTC as APs of Prudential at the time of the
    alleged violations, are also charged with order preparation and
    recordkeeping violations. Chiappone and Sarabasa are currently APs with a
    registered firm.

A public hearing is to be held to determine whether the allegations
    against Marshburn, Prudential, Chiappone, and Sarabasa are true, and if so,
    what sanctions, if any, should be imposed. Possible CFTC sanctions include
    cease and desist orders, assessment of civil penalties of up to $100,000
    for each violation of the CEA and CFTC regulations, trading prohibitions,
    and suspension or revocation of registrations.