Release: # 4235-99 (CFTC
    Docket No. 99-4)

For Release: February 4, 1999

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CFTC ADDS ROBERT C. ROSSI AS
    RESPONDENT

IN ENFORCEMENT
    ACTION

**Amended Complaint Charges Rossi
    Involved in Scheme to Misappropriate**

**Certain Profitable Energy Futures
    Trades of Coastal Corporation and Wrongfully Allocate
    Them**

**to Other Accounts**

WASHINGTON – The Commodity Futures Trading
    Commission (CFTC) announced today the filing of an amendment to an
    administrative complaint filed December 22, 1998, to add Robert C. Rossi
    (Rossi) as a respondent. The original complaint alleged that Steven G.
    Soule (Soule), a former employee of Coastal Corporation (Coastal) in its
    futures trading division, violated the anti-fraud provisions of the
    Commodity Exchange Act (CEA), specifically sections 4b(a)(i), (ii), and
    (iii), by engaging in a scheme in which energy futures trades made on
    behalf of Coastal were misappropriated and wrongfully allocated to accounts
    controlled by respondents Kyler F. Lunman II (Lunman) and his company,
    Hold-Trade, Inc., a.k.a. Hold Trade, Ltd. (Hold Trade). This amendment was
    coordinated with the U.S. Department of Justice's commencement of a
    criminal action today against Rossi, Soule, and Lunman in Texas based on
    the same conduct.

According to the original complaint, Soule and a
    telephone clerk carried out the wrongful allocations, and Lunman and Hold
    Trade furthered the scheme. The amended complaint alleges that Rossi
    committed fraud in violation of section 4b in two fashions: pursuant to
    section 13(a) of the CEA, by aiding and abetting the other respondents; and
    pursuant to section 13(b) of the CEA, as a controlling person of floor
    broker entities known as Refined Energy Executions, Inc. and Refine
    Executions, Inc. (collectively, Refined) who knowingly induced Refined to
    commit violations of the CEA.

Specifically, the amended complaint alleges that
    Rossi, while knowing of the wrongful allocation scheme, the manner in which
    it was being conducted, and the persons and entities who were conducting
    it, assisted the scheme by permitting the use of Refined's facilities
    and telephone clerk. According to the complaint, Rossi received payments
    resulting from the scheme, and also directed that payments be made to or on
    behalf of certain participants in the scheme, including Soule.

The CFTC's amended complaint against Soule,
    Lunman, Hold Trade, and Rossi institutes a public administrative proceeding
    to determine if the allegations in the complaint are true, and if so,
    whether sanctions should be imposed. Possible sanctions include: an order
    directing the respondents to cease and desist from violating the relevant
    provisions of the CEA and CFTC regulations; a permanent trading
    prohibition; civil monetary penalties not exceeding $100,000 for each
    violation; and restitution.

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In DOJ's related action, a federal grand jury
    sitting in Houston, Texas returned an 18-count indictment against Rossi,
    Soule, and Lunman, charging them with conspiracy, commodity fraud, wire
    fraud and money laundering in connection with the scheme.

Geoffrey Aronow, Director of the CFTC's
    Division of Enforcement, made the following statement:

We welcome this opportunity to work closely with
      the Department of Justice in investigating and bringing charges. We
      greatly appreciate the relationship of close cooperation that has
      developed with DOJ from our work on this case. The public is well-served
      when civil and criminal law enforcement authorities pool their expertise
      and resources to pursue wrongdoers. � # # #