Tuesday, May 15, 2007

Commodities Broker Hits Geysers Of Trouble (NYPost)


By RODDY BOYD

Once-highflying commodities broker Optionable is crashing back to earth.

On Friday its CEO abruptly resigned following the bombshell revelation that he has a prison record and failed to disclose it. And now the Nymex has ordered its representative off of Optionable's board as it reviews its $27 million investment in the firm.

Both blows hit as the firm reels from word that the Bank of Montreal is severing its ties to the broker following a $400 million loss that BMO took on bad natural gas bets placed through Optionable.

CEO Kevin Cassidy triggered the latest turmoil when he resigned after questions surfaced about his role in a payment scam that defrauded the government out of import duties in the 1990s. Cassidy served a six-month stretch in federal prison in connection with the crime.

None of Optionable's federal filings or its marketing materials noted his incarceration. Nor were investors - including Nymex, which last month closed on a 19 percent stake in the broker - informed.

A failure to disclose Cassidy's legal problems violates numerous securities laws.

Cassidy and his father are owners of A-1 International Importing Enterprises, which imports ceramic figurines and coin sets. The firm once did a brisk business with the Home Shopping Network.

Both Cassidys were convicted of using money that should have been sent to the IRS for personal expenditures.

According to the federal prosecutors' docket, Cassidy was sentenced on Nov. 17, 1993, and might have received a stiffer sentence had the prosecutors not requested the judge depart from the guidelines.

A call to Cassidy's house was not returned, and a spokesman for Optionable declined to comment. Ex-Chairman Mark Nordlicht, who resigned May 1, declined to comment.

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