In 1991, appellant John Vercillo, a floor broker at the Chicago Board of Trade, was convicted of numerous criminal offenses arising out of four trades in which he participated in 1988. The Commodity Futures Trading Commission (“CFTC” or “Commission”), Division of Enforcement (“Division”), subsequently filed a three-count administrative complaint against Vercillo, charging him with violating various sections of the Commodity Exchange Act and seeking appropriate remedies. After a rather tangled history and several hearings before an administrative law judge (“ALJ”), the ALJ denied Vercillo’s application for registration as a floor broker with leave to reapply in five years, and found that Vercillo should be banned from trading on Commission-regulated markets for a period of five years. Both Vercillo and the Division appealed to the CFTC, which, after a de novo review of the record, issued a final agency decision denying Vercillo’s application for registration and imposing a permanent trading ban against him. Vercillo filed a petition for review with this court, seeking reversal of the denial of his registration and the permanent ban. For the reasons set forth below, Vercillo’s petition is denied and the order of the CFTC is enforced.
BACKGROUND
This case has a long and tangled procedural history which we will attempt to summarize. Vercillo became a member of the Chicago Board of Trade,(“CBOT”) in 1975, and was registered with the CFTC as a floor broker in 1982. As a floor broker, Vercillo was engaged in the trading of contracts for soybean futures in the “pit” of the Board of Trade. 1 Things apparently went smoothly for Vercillo until January 1991, when he was convicted of various criminal offenses stemming from four trades in which he had participated between July 27 and September 12, 1988. In the four trades, Vercillo engaged in curb trading 2 with James Nowak (“Nowak”), a broker in the soybean pit, buying or selling soybean lots from Nowak after the market had closed for the day.
Vercillo, Nowak, and a number of other traders and brokers at the CBOT were indicted for their participation in these and
*551
other illegal schemes. The ease went to trial, and in January 1991, Vereillo was convicted of 11 felony counts, including RICO conspiracy, mail fraud, wire fraud, and various violations of sections of the Commodity Exchange Act (“CEA”) (specifically, §§ 4b(B) and (D), 7 U.S.C. §§ 6b(B) and (D)). On June 4, 1991, Vereillo was sentenced to 27 months in prison, placed on three years of supervised release, ordered to pay restitution in the amount of '$1,800, and fined $10,000. Vercillo’s conviction was upheld by this court on October 80, 1992.
United States v. Ashman,
In June 1991, the Division filed a three-count administrative complaint against Ver-cillo. Counts I and II alleged that Vereillo had violated §§ 4b(B) and (D) of the CEA, 7 U.S.C. §§ 6b(B) and (D), and sought a cease and desist order against him, a suspension or revocation of all his registrations, a trading prohibition, and a civil monetary penalty. Count III alleged that Vereillo, by virtue of his 11 felony convictions, was subject to statutory disqualification from registration with the CFTC under §§ 8a(2)(D) and (E) of the CEA, 7 U.S.C. §§ 12a(2)(D) and (E). The complaint ordered an ALJ to hold a hearing on Count III to determine whether Vereillo was subject to the statutory disqualification and, if so, to suspend his registration and order him to show cause why it should not be revoked.
A hearing was held on June 25, 1991, before Administrative Law Judge George Painter, and shortly thereafter ALJ Painter concluded that Vereillo was statutorily disqualified from registration. Accordingly, ALJ Painter suspended Vercillo’s floor broker registration for six months and ordered him to show cause why his registration should not be revoked. In October 1991, Vercillo’s registration was revoked because he had failed to provide any evidence that his continued registration would be in the public interest. Vereillo was also ordered to answer Counts I and II of the complaint. After his answer was filed, the Division moved for summary disposition on the issue of liability, which ALJ Painter granted. Both parties briefed the ALJ on the issue of sanctions, the Division recommending that a ceáse and desist order and-permanent trading- ban be imposed and Vereillo arguing that -the minimum sanction would suffice. Vereillo also requested a hearing on the issue of sanctions. In December 1992, ALJ Painter, without regard to Vereillo’s request for a hearing, issued an order imposing a cease and desist order and a seven year trading ban on Ver-cillo. Both Vereillo and the Division appealed the ALJ’s decision to the CFTC.
In August 1993, the Commission found that the ALJ had abused his discretion by failing to hold a hearing on the issue of sanctions. The Commission determined that the ALJ must give weight to the congressional mandate in § 9(b) of the CEA, 7 U.S.C. § 13(b), and found' that the large number of felonies for which Vereillo was convicted under § 4b of the CEA raised a presumption that he should be permanently banned from trading. Accordingly, the CFTC reversed the decision of the ALJ and remanded the case for a hearing to permit Vereillo to attempt to rebut the presumption. The Commission directed ALJ Painter to impose a permanent trading prohibition on Vereillo unless he could demonstrate by the weight of the evidence that his access to Commission-regulated markets would pose no, substantial threat to their integrity.
In re Vercillo,
[1992-94 Transfer Binder]
While the appeal was pending before the CFTC, Vereillo applied for registration as a floor trader and briefly returned to the CBOT under a “no action”'status.
3
The Division challenged the application by filing a
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second complaint against Vercillo in July 1993, giving notice of its intent to deny his registration. This second complaint ordered the ALJ to ascertain whether Vercillo was subject to a statutory disqualification from registration. In August 1993, the ALJ determined that Vercillo was subject to statutory disqualification of his registration under §§ 8a(2)(D) and (E) of the, CEA, 7 U.S.C. §§ 12a(2)(D) and (e). The ALJ suspended Vercillo’s no-action status and directed him to show cause why his application for registration should not be denied. Subsequently, however, the ALJ vacated his order and consolidated the proceedings under the second complaint with those under the first complaint. The Division took an interlocutory appeal of the ALJ’s decision, which the CFTC reversed, reinstating the suspension of Vercillo’s no-action status and vacating the consolidation order.
In re Vercillo,
[1992-94 Transfer Binder]
In January 1994, the ALJ conducted a simultaneous hearing on both the first and second complaints. In support of its case, the Division presented the testimony of FBI agent Richard Ostrom, as well as documentary evidence establishing that Vercillo had been convicted of numerous felonies. Vercillo testified on his own behalf, and also presented the testimony of three character witnesses. Vercillo’s testimony, and the documents in the record, described the four transactions underlying his convictions. In each of the four instances, Vercillo had either bought contracts from, or sold contracts to, Nowak after trading on the CBOT had closed for the day and at predetermined (i.e., other than market) prices. 4 In May 1994, the ALJ issued a decision, concluding that Vercillo had presented sufficient evidence to establish that he was rehabilitated and that he should not be permanently barred from registering as a floor trader. The ALJ also found that Vercillo had rebutted the presumption that he should be permanently barred from trading on any CFTC-regulated markets. ALJ Painter held that Vercillo could reapply for registration after five years had elapsed, and that Vercillo should be banned from trading for five years. Both Vercillo and the Division appealed.
On appeal, the CFTC overruled the decision of the ALJ. It found that Vercillo had failed to rebut either the presumption that his registration should be permanently denied or the presumption that he should be permanently banned from trading on any CFTC-regulated market. The Commission entered a final decision to this effect on May 30, 1997.
In re Vercillo,
[Current Transfer Binder]
DISCUSSION
We review decisions of the CFTC deferentially. The Commission’s findings of fact are conclusive, and we will not disturb them, if they are supported by the weight of the evidence. 7 U.S.C. § 9;
Monieson v. CFTC,
I. Standard of Review Utilized by the Commission
First, Vercillo argues that the CFTC abused its discretion by failing to defer to the factual findings and determinations of the ALJ and by reviewing the ALJ’s determinations
de novo.
He alleges that the Commission, at the time the hearings began, accorded deference to the ALJ’s factual determinations, citing
In re Ferragamo,
[1990-92 Transfer Binder]
To the extent Vercillo is arguing that the CFTC acted
arbitrarily
in applying a
de novo
standard in general or was without the power to use that standard at all, his claim is without merit. In a recent decision,
Ryan v. CFTC,
On review, the Commission may affirm, reverse, modify, set aside of remand for further proceedings, in whole, or in part, the initial decision by the Administrative Law Judge and make any findings or conclusions which in its judgment are proper based on the record in the proceeding.
17 C.F.R. § 10.104(b).
See also JCC, Inc. v. CFTC,
Furthermore, as the Commission itself noted in
In re Grossfeld,
it had, in the past, reviewed the imposition of sanctions by an ALJ
de novo.
It moved to the abuse of discretion standard, however, to “discourage appeals which simply asked [it] to second-guess the sanctions imposed by the ALJs.”
While Vercillo emphasizes that the Commission was utilizing a deferential standard of review at the time of his - hearings before the ALJ, he does not provide any reason why its
de novo
review of his appeal was arbitrary. It is true that Vercillo’s appeal was pending before the Commission at the time it issued its decision in
In re Grossfeld;
however, it is established that “[generally, a decision which changes existing law or policy is given retroactive effect unless retroactive application would cause ‘manifest injustice.’”
NLRB v. Bufco Corp.,
II. Sanctions Imposed by the Commission
Vercillo next asserts that the Commission abused its discretion by discarding the order óf ALJ Painter and imposing its own sanctions against him. First, Vercillo challenges the Commission’s denial of his registration, which is governed by §§ 8a(2)(D) and (E) of the CEA. Thereunder:
The commission is authorized' — •
(2) upon notice, but without a hearing and pursuant to such rules, regulations, or orders as the Commission may adopt, to refuse to register, to register conditionally, or to suspend or place restrictions upon the registration of, any person and with such a hearing as may be appropriate to revoke the registration of any person—
(D) if such person has been convicted within ten years preceding the filing of the application for registration or at any time thereafter of any felony that ... (ii) arises out of the conduct of the business of a futures commission merchant, introducing broker, floor broker, floor trader ..., (iii) involves embezzlement, theft, extortion, fraud, fraudulent conversion, misappropriation of funds, securities or property, forgery, counterfeiting, false pretenses, bribery, or gambling, or (iv) involves the violation of section ... 1341, ... 1343, ... [or] 1962 ... of Title 18
(E) if such person, within ten years preceding the filing of the application or at any time thereafter, has been found in a proceeding brought, by the Commission or any Federal or State agency or other governmental body ... (i) to have violated any provision of this chapter [the Commodity Exchange Act, 7 U.S.C. §§ 1 et seq.] ... where such violation involves embezzlement, theft, extortion, fraud, fraudulent conversion, misappropriation of funds, securities or property, forgery, counterfeiting, false pretenses, bribery, or gambling, or (ii) to have wilfully aided, abetted, counseled, commanded, induced, or procured such violations by any other person.
7 U.S.C. § 12a(2)(D) and (E) (West Supp. 1998).
Once the Commission proves that an individual is statutorily disqualified under § 8a(2)(D) (and, presumably, § 8a(2)(E) as well), a presumption is raised that he is unfit to act as a Commission registrant.
In re Horn,
[1990-92 Transfer Binder]
Vercillo does not question on appeal whether the Division proved that he was statutorily disqualified from being registered as a floor agent; rather, he' asserts that the CFTC erred when it found, contrary to the decision of the ALJ, that he had not sufficiently rebutted the presumption against reg-istrability. Much of Vercillo’s brief is devoted to questioning the weight certain evidence was given by the Commission and arguing that the ALJ’s determinations should have been accorded deference. It is true, as Ver-cillo alleges in his brief, that credibility determinations of an ALJ are entitled to great deference and should be overturned only in extraordinary circumstances.
See, e.g., J.C. Penney Co., Inc. v. NLRB,
Our review of the Commission’s decision to deny Vercillo’s registration shows that it is supported by the evidence and was not an abuse of discretion. With regard to evidence mitigating the effect of Vercillo’s wrongdoing, the ALJ found that a rule change by the CBOT lessened the chances that Vercillo would again engage in such acts. After Vercillo’s conviction, the CBOT institutionalized the practice of curb trading (at least to some extent) and now allows limited trading after the closing bell. The Commission disagreed with the ALJ, finding that this change did not serve to mitigate Vercil-lo’s actions. The Commission found, citing our opinion in
Ashman,
that Vercillo and the other traders had not just engaged in curb trading, but had also engaged in noncompetitive trading by agreeing to the prices at which the trades would take place, thus removing them from the competitive market. Such noncompetitive trading is not allowed under the new CBQT rule, and the fact that curb trading is partly institutionalized does not help Vercillo. In addition, as the CFTC argues in its brief to this court, subsequent rule changes do not mitigate conduct which was illegal at the time it was committed.
Ryan,
The ALJ also found that although Vercillo was convicted of numerous felonies, these convictions did not necessarily reflect that he intended to’ cheat or defraud any customers, and characterized his crimes as crimes, of convenience rather than crimes of greed. The CFTC disagreed with this finding as well, concluding that Vercillo’s violations were numerous, intentional, and serious. This finding is well supported by the record. As we noted in
Ashman,
“Vercillo ... [was] well aware that [he] was part of an ongoing and flexible agreement to commit fraud as the need — or perhaps the oppoi’tunity— arose.”
The Commission also considered other evidence not discussed by the ALJ. For instance, it rejected an argument by Vercillo that the small amount of restitution that he was ordered to pay shows that his conduct did not harm customers. Citing
Ashman,
Vercillo next asserts that the Commission erred in finding that he had not presented enough evidence of rehabilitation to overcome the presumption of non-registra-bility. First, we note that Vercillo, in his brief, sets forth an incorrect burden or proof. Therein, he states that “[t]here is simply no evidence that he is not rehabilitated.” Appellant’s Brief at 23 (emphasis in original). This misstates the burden of proof, since it is up to Vercillo to show that he is rehabilitated and not up to the Commission to show that he is not. In any event, the record contains substantial evidence to support the CFTC’s decision.
First, Vercillo argues that the CFTC abused its discretion by not giving weight to his character witnesses. At the hearing before the ALJ, Vercillo called as character witnesses Scott Early, the general counsel of the CBOT, Mark Gold, a independent trader at the CBOT, and Henry Shatkin, the CEO of a trading company which operates at the CBOT. The Commission stated that it did not accord significant weight to the testimony of any of these witnesses because it does not do so “unless such witness was qualified as an expert.”
Vercillo II,
Reflecting our increasing frustration with the lack of criteria, we set forth in
Ryan
that “[ujntil the Commission provides some guidance regarding the kind of testimony it will accept, we will consider it to be an abuse of discretion for the Commission to discount the testimony of character witnesses solely for not being experts.”
Ryan,
As in
Ryan,
however, we find that notwithstanding the CFTC’s abuse of discretion, reversal is not warranted in this case because the Commission offered a valid reason to
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accord the testimony of Vercillo’s witnesses limited weight. In its decision, the Commission stated that the testimony of Vercillo’s witnesses was “not persuasive” because it only showed “at best a perfunctory concern with the customers harmed by Vercillo’s wrongdoing,” and therefore showed that they had a limited appreciation of the interest of the public.
Vercillo II,
Second, Vercillo asserts that his expression of remorse shows that he is rehabilitated. The Commission gave this evidence little weight as well, finding that the wrongful nature of Vereillo’s actions was clear at the time he committed his acts. This result is consistent with the CFTC’s previous position on statements of contrition. In
In re Horn,
the Commission stated that “[w]hen the wrongful nature of the conduct at issue is clear' at the time of the violation, expressions of contrition following detection of the wrongdoing do not necessarily indicate a significant change in character.”
In re Horn,
Finally, ■ Vercillo argues that the fact he has committed no violations of the law since his conviction demonstrates that he is rehabilitated. He also notes that he traded at the CBOT for nine weeks in 1993 without getting into trouble, and that the Commission should have taken this into account. The CFTC acknowledged this evidence, but found that nine weeks of trading was too little to demonstrate that Vercillo had undertaken a changed direction in life. This view was in accord with Commission precedent that while subh evidence may be probative of rehabilitation, it is not given substantial weight when the period in question is limited.
In re Bryant,
[1990-92 Transfer Binder]
In sum, the record supports the Commission’s conclusion that Vercillo did not rebut the presumption that his registration should be denied. Accordingly, we affirm the CFTC’s decision to deny Vercillo’s registration as a floor broker.
*558 Vercillo also challenges the permanent trading ban placed on him by the Commission. At the evidentiary hearing, the Division submitted proof that Vercillo had been convicted of six felonies arising under § 4b of the CEA. Pursuant to § 9(b) of the CEA, 7 U.S.C. § 16(b), such felony convictions give rise to a presumption that Vercillo should be permanently banned from trading on Commission-regulated markets unless he can show by the weight of the evidence that his continued access to such markets will not pose a risk to their integrity. The relevant statute states:
Any person convicted of a felony under this section shall be ... barred from using, or participating in any manner in, any market regulated by the Commission for five years or such longer period as the Commission shall determine, on such terms and conditions as the Commission may prescribe, unless the Commission determines that the imposition of such ... market bar is not required to protect the public interest.
7 U.S.C. § 13(b).
Vercillo asserts generally that the evidence he presented on rehabilitation was unrebut-ted, noting that the Division relied solely on the fact that he had been convicted of numerous felonies in support of levying sanctions against him. Our discussion above, finding that the Commission did nor err in finding that Vereillo’s evidence did not meet his burden of proof, is equally applicable with regard to the imposition of a trading ban, and we need not repeat ourselves here.
Vercillo also argues that he established that he was not a threat to the marketplace. His sole argument on this point, however, consists of comparing the length of his permanent trading ban with trading bans imposed on others engaged in allegedly comparable conduct. For instance, Vercillo asserts that Nowak received only a six-year trading ban even though his “participation in the same conduct [as Vercillo] makes him equally unfit” to trade. Appellant’s Brief at 24. Part of the reason for Nowak’s ban being shorter than Vercillo’s, as the brief notes, is the fact that Nowak reached a settlement with the Commission.
5
Vercillo also cites several other cases in which traders were given shorter bans or registration suspensions than he was. This comparison misses the point, however, since, as Vercillo notes in his brief, “sanctions must be fashioned on a case by case basis.” Appellant’s Brief at 23 (citing
In re Thomas McKinnon Futures, Inc.,
[1986-87 Transfer Binder],
III. Permanent Trading Ban and Double Jeopardy Clause
Lastly, Vercillo asserts that the permanent trading ban imposed by the CFTC and the revocation of his trading license violate the Double Jeopardy Clause of the Fifth Amendment, because he has already received a prison sentence and been ordered to pay a fine and restitution for the same acts. However, this argument must fail after recent decisions of both the Supreme Court and this court.
See, e.g., Hudson v. United States
, — U.S. -,
*559 CONCLUSION
The record demonstrates that the Commission’s choice to deny Vercillo’s registration and permanently ban him from trading on CFTC-regulated markets is not unwarranted in law or without justification in fact. Accordingly, Vercillo’s petition for review is Denied and the order of the CFTC is Enforced.
Notes
. The exact workings of the CBOT need not be spelled out for purposes of this appeal. For a detailed discussion of the futures market, see
United States v. Ashman,
. "Curb trading” refers to trades taking place after the closing bell has sounded to end official trading for the day. While against the CBOT's rules at the time surrounding Vercillo's illegal trades, "curb trading" has since been officially recognized and is allowed to a limited extent. See Rec. Doc. 76 at 54-57.
. Apparently, floor traders did not need to be registered prior to the enactment of the Futures Trading Practices Act of 1992, Pub.L. No. 102-546. During the transition between the old law and the new law, the Commission conferred "no action" status on those who had floor trading privileges as of April 26, 1993, and had applied for floor trader registration by June 11, 1993. "No action" status allowed an individual to act as a floor trader while their application was being processed. At some point, Vereillo apparently had this status conferred upon him. For a more detailed explanation, see
Vercillo II,
. The exact details of the underlying transactions leading to Vercillo's felony convictions are not crucial to the instant appeal.
. While it is understandable that the CFTC apparently shows some leniency to those with whom it reaches a settlement, it is a bit troubling that Nowak, the apparent mastermind of the illegal conduct engaged in by Vercillo, has received a comparative slap on the wrist for his wrongdoing.