Archive

August 1, 2014

The CFTC filed a civil enforcement Complaint against Southern Trust Metals, Robert Escobio and Loreley Overseas Corp. charging them with violating the Dodd-Frank Act by operating an illegal, off-exchange precious metals scheme involving at least 135 customers who collectively lost $600,000 of the funds they invested.  CFTC

July 29, 2014

JP Morgan Securities, a wholly-owned subsidiary of JPMorgan Chase & Co., agreed to pay $650,000 to settle CFTC charges of submitting inaccurate reports to the CFTC relating to the required reporting of positions held by certain large traders whose accounts are carried by JPMS.  The reports are known as “large trader” reports and are used by the CFTC to evaluate potential market risks and monitor compliance with CFTC requirements.  The reporting violations occurred despite the CFTC notifying JPMS of numerous errors in its reports.  CFTC

July 28, 2014

The CFTC issued an Order against Lloyds Banking Group and Lloyds Bank for false reporting and attempted manipulation of the London Interbank Offered Rate (LIBOR) for Sterling, U.S. Dollar, and Yen. The CFTC also brought and settled charges that Lloyds aided and abetted the attempts of derivatives traders at Rabobank to manipulate Yen LIBOR.  The Order requires Lloyds Banking Group and Lloyds Bank to pay a $105M civil monetary penalty, cease and desist from their violations of the Commodity Exchange Act, and to adhere to specific undertakings to ensure the integrity of LIBOR submissions in the future.  CFTC

June 19, 2014

The CFTC obtained a court Order requiring Texas resident Robert J. Andres and his company Winsome Investment Trust and California resident Robert L. Holloway and his company US Ventures LC to pay a civil penalty of $32M and restitution for defrauded customers totaling $12M for their fraud in the operation of a commodity futures pool.  Specifically, the Order found that the defendants fraudulently solicited and accepted at least $50M from at least 243 individuals to invest in a commodity futures pool by falsely claiming successful track record and guaranteeing the return of participants’ principal and profits.  In reality, however, their futures trading was not successful, sustaining overall net losses of approximately $10.7 million and they operated it like a Ponzi scheme and used participants' funds to pay personal and unrelated business expenses, and to pay for houses, cars, home furnishings, jewelry, lawn and maid services, and credit card bills.  In parallel criminal actions, Andres and Holloway were indicted on multiple counts of wire fraud.  CFTC

June 11, 2014

The CFTC obtained a default judgment against Michael James Seward, Yan Kaziyev and their company SK Madison Commodities, a Commodity Pool Operator based in New York City, requiring them to pay restitution totaling $1M and a civil penalty of $2.5M for fraudulently soliciting more than $1.3M from members of the public to trade futures in a commodity pool.  Specifically, the defendants were found to have misrepresented their trading practices and historical trading returns and prepared and distributed to pool participants false account statements and performance reports showing huge profits when in reality they were losing money and diverting large amounts of pool participants’ funds for their own use.  CFTC

May 21, 2014

The CFTC obtained an emergency court Order freezing and preserving the assets under the control of Cindy and Paul Vandivier and their company, Mintline, Inc., all of Florida.  The Order stems from a CFTC enforcement action charging the Vandiviers and Mintline with fraudulently soliciting customers and misappropriating customer funds in connection with illegal, off-exchange transactions in precious metals from July 2011 to at least April 2013.  CFTC

April 28, 2014

The CFTC obtained a Consent Order against Tunney & Associates, P.C, an accounting firm with offices in Hammond, Indiana and Orland Park, Illinois, and Michael Tunney, its sole owner and a certified public accountant, requiring T&A and Tunney jointly to pay a $100,000 civil penalty for violating CFTC Regulations when conducting audits for The Linn Group, a CFTC-registered Futures Commission Merchant.  CFTC

April 18, 2014

The CFTC filed an enforcement action against Wayne Pennoyer Weddington III and his companies, Brunswick Capital and Brunswick Capital Partners, charging them with solicitation fraud, making false statements, and registration violations in connection with a commodity pool that he formed called Pennoyer International Funds Global Opportunity.  CFTC

April 17, 2014

The CFTC issued an Order filing and simultaneously settling charges against Florida resident Derek J. Bridges and his companies Empire Sterling Metals and I.P.M. Investments for engaging in illegal, off-exchange precious metals transactions.  The CFTC Order requires Bridges and Empire jointly to pay restitution totaling $243,000 and Bridges and I.P.M. jointly to pay restitution totaling $15,000 to their customers.  CFTC

March 21, 2014

Utah-based Okland Construction Co. agreed to pay $928,000 to resolve allegations it made false statements and submitted false claims under the Small Business Administration’s Section 8(a) Program for Small and Disadvantaged Businesses.  The allegations were first raised in a qui tam lawsuit filed by Section 8(a) participant Saiz Construction Co. and its owner Abel Saiz under the whistleblower provisions of the False Claims Act.  They will receive a whistleblower award of $148,480.  DOJ