FINANCIAL CRIME NEWS
COMMODITIES and DERIVATIVES NEWS STORIES
By Stephanie Ayres
16 February 2007
Miami, Florida
The Commodity Futures Trading Commission (CFTC) announced on September 5 that International Investments Holding Corporation, an entity with offices in South Florida which had been accused of operating a fraudulent commodity futures and options trading scheme, will pay $6.060,000 of restitution and $6,060,000 of civil penalties in a final judgment entered in the CFTC’s civil case. The company will also be subject to a permanent injunction barring it from business activities involving commodity futures or options trading.
Also see “Financial Crime News” story “CFTC Lawsuit Targets International Investments Holdings Forex Scheme,” November 27, 2006.
MERCURY MANAGEMENT AND PROMOTERS BARRED FROM COMMODITY TRADING ACTIVITIES IN SETTLEMENT OF CFTC CASE
By Stephanie Ayres
9 February 2007
West Palm Beach, Florida
The Commodity Futures Trading Commission (CFTC) announced on September 14 that a permanent injunction has been entered in its case against Mercury Management LLC of Lake Worth, Florida, two affiliates, and two promoters of a commodities futures scheme marketed through Mercury Management.
As part of a consent agreement that resulted in the settlement and injunction, Mercury Management will pay an as yet unspecified amount of customer restitution and civil penalties totaling over $508,000. Mercury affiliates Mercury Partners (a Bahamas entity operated from Boca Raton) and Mercury Financial Partners of Pompano Beach, Florida are also barred from commodity trading activities and will each pay $148,756 of restitution and $1,080,000 in civil penalties.
Also permanently barred from commodities marketing schemes are three individuals associated with Mercury Management who were defendants in the CFTC’s case: Andrew Bartos of Houston, Texas; Michael Morgan of West Palm Beach; and Bruce N. Crown, who the CFTC statement notes as being incarcerated in Georgia. According to the CFTC’s September 14 statement, Crown was also ordered to pay $50,000 restitution to a specific customer of one of the Mercury companies whom he had been accused of soliciting to purchase crude oil options through a nonexistent brokerage account. Crown had been accused of misappropriating this customer’s investment.
By Stephanie Ayres
2 February 2007
New York, New York
The Commodity Futures Trading Commission (CFTC) announced on August 16 that a judgment was entered in federal court in New York in its case against James de Wet of South Africa, who did business as Team Forex International. The order calls for de Wet to pay $828,390 of restitution to customers, to disgorge $63,070 of profits from his scheme, and to pay a $120,000 civil penalty. Previously, notes the CFTC statement, a permanent injunction had been entered in the case barring de Wet from future activities in violation of the US Commodity Exchange Act.
See also “Financial Crime News” story “South African Sued by CFTC for Alleged Misrepresentation of Commodity Trading Record,” November 14, 2005.
By Stephanie Ayres
30 January 2007
Atlanta, Georgia
The Commodity Futures Trading Commission (CFTC) announced on August 30 that Georgia-based Risk Capital Trading Group and four commodities brokers affiliated with the company have been permanently barred from commodity-related activity by an injunction entered in the CFTC’s civil case, originally filed in September 2003.
In its action, the CFTC had alleged that between 2001 and 2003, Risk Capital and its brokers used boiler room type tactics to pressure customers into setting up futures and options accounts with Risk Capital Trading while misrepresenting the possibilities of profit and loss from this type of trading. According to the CFTC, Risk Capital Trading’s commodity futures and options customers lost some $16 million. About 98% of such accounts were found to have had losses.
Brokers subject to the injunction include Deron Baugh of Coral Springs, Florida; Ty Edwards of McDonough, Georgia; Stephen Margol of Fort Lauderdale, Florida; and Juan Valentin of Marietta, Georgia. A separate order barring commodity activities was issued for Richard Tillman of Sunny Isles, Florida. The CFTC’s case against Risk Capital Trading broker Rick Siegel of Atlanta went to trial, resulting in a permanent injunction and other sanctions reportedly entered August 14.
The CFTC reported the following restitution and penalty orders for Risk Capital Trading and its associates who were defendants in CFTC actions:
| Name | Restitution | Civil Penalties |
|---|---|---|
| Risk Capital Trading Group | $12,833,470 | $8,771,235 |
| Baugh | $125,000 | $225,000 |
| Edwards | $250,000 | $200,000 |
| Margol | $44,000 | $86,000 |
| Valentin | $15,000 | $60,000 |
| Tillman | $15,000 | $60,000 |
| Siegel | $8,302 | $150,000 |
By Stephanie Ayres
29 January 2007
New York, New York
The Commodity Futures Trading Commission (CFTC) announced on August 10 that COES FX Clearing Inc of Plainview, New York, a futures commission merchant, has agreed to settlement of charges in a CFTC civil action from 2005. The related consent order provides for COES FX to reimburse $246,601 to customers allegedly defrauded through a commodities scheme operated by individuals found to have been acting as agents of COES when they solicited customer deposits.
For more information on the scheme involving agents of COES FX, see “Financial Crime News” story “Windsor Forex Operator Sued by CFTC,” July 5, 2005.
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