Release:#3915-96 (CFTC Docket No. 95-5)

For Release:June 11, 1996

CFTC ADMINISTRATIVE LAW JUDGE ORDERS CIVIL MONETARY PENALTY
    OF

$1.77 MILLION, REVOCATION OF REGISTRATION, PERMANENT TRADING BAN, AND
    CEASE AND DESIST ORDER AGAINST MICHAEL F. STARYK OF FLORIDA

WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced
    today that on June 5, 1996, the Honorable Bruce C. Levine, CFTC
    Administrative Law Judge (ALJ), entered an Initial Decision ordering a
    civil monetary penalty of $1.77 million, revocation of registration, a
    permanent trading ban, and a cease and desist order against Michael F.
    Staryk of Boca Raton, Florida. (In the Matter of Michael F. Staryk, CFTC
    Docket No. 95-5.)

The ALJ's action stems from a complaint filed by the CFTC on February 7,
    1995, charging that Staryk engaged in violations of the anti-fraud
    provisions of the Commodity Exchange Act (CEA) and CFTC regulations.
    The complaint alleged that, from August 1991 to the time of the Complaint's
    filing, Staryk engaged in fraud by misrepresentation and omission of
    material facts in connection with the solicitation of commodity options
    transactions (See CFTC News Release 3819-95, February 10, 1995).

Staryk Found to Have Made Fraudulent Representations of Risk and
    Profit in Connection With Gasoline and Heating Oil Options.

Specifically, the ALJ found that Staryk committed fraud by conveying a
    message to potential customers that, given the historical seasonal pricing
    trends in gasoline and heating oil, speculation in gasoline and heating oil
    options is significantly less risky and more likely to result in profits
    than speculation in options tied to non-seasonal markets.

In finding this message to be "blatantly false," the ALJ explained,
    "[t]ypical seasonal shifts in commodity prices, which are already accounted
    for in the futures prices, options prices, and strike prices, simply do not
    have any bearing on whether the value of an option will increase or
    decrease prior to its expiration."

Having established that Staryk misled his customers regarding the risk
    and likely profitability of gasoline and heating oil options, the ALJ went
    on to find that Staryk's misrepresentations and omissions of material fact
    violated the anti-fraud provision of the CEA through his "emphatic
    promotion" of the seasonal advantage of heating oil and gasoline options
    while admitting his knowledge that commodity options are not less risky in
    one market versus another. The ALJ stated:

Given his knowledge of the options markets, particularly gasoline and
    heating oil options, -- and given that Staryk's theories and strategies had
    failed in his own laboratory [$3.3 million in customer losses] -- this
    Court may and does infer that Staryk had knowledge that his representations
    were false or that at a minimum they were made with reckless disregard for
    the truth.

--The ALJ then entered summary disposition imposing a civil monetary
    penalty of "three times Staryk's wrongful gain" equalling $1.77 million,
    revoking Staryk's registration as an associated person, imposing a
    permanent trading prohibition, and entering a cease and desist order.

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