Release:#3927-96 (Civ. 93-1567)

For Release:July 23, 1996

FLORIDA COURT ENTERS CFTC SETTLEMENT ORDER WITH CONCORDE TRADING
    GROUP OF AVENTURA, FLORIDA, AND CONCORDE PRESIDENT ARTHUR J. SCHLECHT,
    NETTING $1.5 MILLION IN CUSTOMER RESTITUTION,

AMONG OTHER SANCTIONS AGAINST THE DEFENDANTS

Florida Court's Approval of Settlement Also Prohibits Fraudulent
    Statements and Omissions in Marketing Commodity Options, Requires Stringent
    Controls on Sales Operations

WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced
    today that U.S. District Judge Stanley Marcus of the U.S. District Court
    for the Southern District of Florida entered a consent order of permanent
    injunction against Concorde Trading Group, Inc., an introducing
    broker located in Aventura, Florida, and Concorde's president, Arthur J.
    Schlecht, of Miami, Florida.

The consent settlement agreement follows nearly three years of
    litigation against the firm and Schlecht, commencing in August 1993 when
    the CFTC filed a two-count civil complaint against the defendants,
    including a former Concorde branch manager, Frederick N. Hollander, of
    Sunrise, Florida, alleging violations of the anti-fraud provisions of the
    Commodity Exchange Act (CEA) and CFTC regulations, including that
    the defendants make false, deceptive, and misleading representations of
    material facts in connection with the solicitation of customer commodity
    option accounts (see CFTC release #3689-93, August 18, 1993).

The CFTC's complaint alleged that, through high-pressure telephone sales
    activities, the defendants committed fraud, specifically, by, in the course
    of soliciting customers to purchase options on commodities, routinely
    making false, deceptive, and misleading oral representations and omissions
    of material fact regarding the likelihood of profits, the risk of loss
    (particularly regarding seasonal factors in energy futures and options
    contracts), and the experience and trading record of Concorde and its
    salesforce. Hollander settled the CFTC's charges shortly after the filing
    of the complaint.

Failure to Make the Ordered $1.5 Million of Restitution Payments
    Would Result in Concorde and Schlecht Being Barred Permanently from the
    Futures Industry

Under the court's consent order, Concorde and Schlecht have agreed to
    pay $1.5 million in restitution to former Concorde customers who maintained
    a commodity futures trading account introduced by Concorde after February
    1, 1992, to settle CFTC charges in connection with telemarketing options on
    commodities such as heating oil and unleaded gasoline.

The order also prohibits Concorde and Schlecht from specific
    misrepresentations and deceptive omissions in connection with their sales
    activities, and requires their diligent supervision of customer accounts.
    Concorde and Schlecht also must implement measures to

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monitor their sales operations. Should Concorde or Schlecht fail to make
    timely payment of their obligation, the order provides that they shall be
    permanently prohibited from acting in any capacity, including their present
    capacities, for which registration under the CEA is required.

In commenting on the settlement, CFTC Acting Chairman John Tull
    said:

"This settlement reflects the CFTC's commitment to use its enforcement
    resources to put money back in the pockets of injured customers, whenever
    it's possible. The customers who will receive restitution lost substantial
    amounts in what defendants touted as 'seasonal investment
    opportunities.'"

Order Lists Prohibited Misrepresentations and Omissions of Material
    Fact Related to the Solicitation of Commodity Options

In addition, the settlement order permanently enjoins and restrains
    Concorde and Schlecht from further violations of the CEA and CFTC
    regulations as charged. To that end, for the first time in a CFTC
    settlement, the court order specifically lists the prohibited
    misrepresentations and omissions of material fact related to the
    solicitation of customers or prospective customers to purchase commodity
    option investments to customers. In this regard, the consent order prohibits the following misrepresentations and omissions:

Representing to customers and prospective customers

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that they are guaranteed to make a profit as the result of an investment
    in commodity options,

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that trading commodity options is virtually risk- free, and

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that disclosure documents required by CFTC regulation are insignificant
    or of little importance, or words to that effect.

Omitting to inform customers and prospective customers

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that a seasonal increase in demand for a specific commodity, such as
    heating oil and unleaded gasoline, in and of itself, will not necessarily
    result in increased value of the option on the given commodity,

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that past trends in futures prices on specific commodities do not
    necessarily forecast current profitability of options on futures contracts
    on those commodities, -- that currently known market news does not
    necessarily mean that a Concorde customer will make money by trading
    through Concorde as currently known market news is usually already factored
    into the underlying futures price, as well as the option value,

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that, except possibly for in-the-money options, a rise in the price of
    the underlying futures contract does not typically correlate on a
    one-to-one ratio with a rise in the price of an option on that futures
    contract,

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that stop loss orders are not always effective in limiting risk of
    loss,

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that diversification of option positions does not necessarily limit risk
    of loss or increase profit potential for each option position purchased,
    and

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that, under certain market conditions, a customer may find it difficult
    or impossible to liquidate a position since market conditions on the
    exchange where the order is placed may make it impossible to execute a
    liquidation of the position.

CFTC Acting Chairman Tull, in emphasizing the importance of the examples
    of prohibited misrepresentations and omissions contained in the order,
    observed:

"These types of misrepresentations, and to a greater extent, material
    omissions, lie at the core of the commodity options sales practices of many
    introducing brokers. By setting forth specific examples of prohibited
    misrepresentations and omissions, the consent order should serve not only
    to deter future unlawful conduct by Concorde, but also to put on notice
    other similarly situated operations that they must address such deceptive
    practices to avoid future actions by the CFTC."

Order Directs Concorde and Schlecht to Implement Internal Compliance
    Measures Specifically Designed to Deter Future Sales Violations

Finally the settlement order requires that Concorde and Schlecht to
    implement internal compliance measures specifically that are designed to
    deter future sales violations, including:

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hiring a full time compliance officer, whose salary is in no way
    dependent on the level of Concorde's sales, to tape record and monitor
    regularly the sales activities of the firm and reporting the findings to
    Schlecht and the CFTC, upon the Commission's request, and

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securing the services of a qualified independent consultant for a
    minimum of 5 years to tape record and monitor, independently and
    periodically, the sales activities of the firm and report the findings to
    Schlecht and the CFTC.

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