CFTC News Release: #4206-98 (98 Civ 5270)

November 18, 1998

New York District Court Orders Disgorgement of $2.6 Million in
    Frontrunning Scheme and Bars Thomas E. Kelly, Andrew David Rhee, and Reflex
    Asset Management Corporation From the Futures Industry

Washington -- The Commodity Futures Trading Commission (CFTC) announced
    today that on November 3, 1998, U.S. District Judge Jed S. Rakoff of the
    Southern District of New York entered consent orders of permanent
    injunction against Thomas E. Kelly of Boca Raton, Florida, Andrew
    David Rhee of Miami Beach, Florida, and Reflex Asset Management
    Corporation, a Delaware corporation located in Miami Beach,
    Florida.

The orders bar the defendants from any activity in the futures industry,
    permanently enjoin them from violations of federal commodities laws, and
    require disgorgement payments totaling approximately $2.6 million.

The court's orders stem from a two-count civil injunctive action filed
    by the CFTC on July�23, 1998 alleging that, from October 1995 through
    February 1998, the defendants cheated, defrauded and willfully deceived
    Kelly's employer, John W. Henry & Co. (JWH) and others (see CFTC News Release #4171-98, July 23,
    1998).

Specifically, the CFTC complaint charged that Kelly stole material
    confidential non-public proprietary information concerning JWH's planned
    commodity futures trades and provided that information to Rhee. Rhee, in
    turn, allegedly placed trades -- ahead of JWH's commodity futures trades --
    in Reflex's commodity pool account, his personal commodity trading account,
    and the accounts of several customers. This scheme resulted in profits for
    the defendants of approximately $4.7 million.

Further, the complaint alleged that Rhee created a commodity futures
    trading performance record for himself and Reflex, which they used to
    solicit new customers and retain existing customers, that omitted the
    material fact that the success reflected in the trading record was in large
    part based on the use of the confidential information Kelly stole from
    JWH.

Without admitting or denying the allegations of the complaint, Kelly,
    Rhee and Reflex have agreed to be enjoined permanently from further
    violating the provisions of the Commodity Exchange Act alleged in the
    complaint. The orders also prohibit all defendants from engaging in any
    activity in the futures industry for themselves or on behalf of others.
    Kelly and Rhee are ordered, jointly and severally, to disgorge $4,735,000,
    the amount by which they profited. Due to their current financial
    situations, the court waived all of that disgorgement but $291,938 as to
    Kelly and all but $2,308,578 as to Rhee.

The filing of the CFTC complaint had followed 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. On July 23,
    1998, both Rhee and Kelly pled guilty to federal felony wire fraud charges
    brought by the U. S. Attorney based upon this same activity. Rhee and
    Kelly's sentencing in the related criminal action is scheduled for December
    7, 1998.