FROM: U.S. COMMODITY FUTURES TRADING COMMISSION
Federal Court Orders More than $1.3 Million in Sanctions and Enters a Default Judgment Order against Florida-Based Gold Distributors, Inc. and Its Owner, Jordan Cain, for Engaging in Illegal, Off-Exchange Commodity Transactions
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge William J. Zloch of the U.S. District Court for the Southern District of Florida entered an Order of default judgment against Defendants Gold Distributors, Inc. (GDI) of Hallandale Beach, Florida, and its sole owner Jordan Cain of Miami, Florida. The Order requires the Defendants to pay restitution in the amount of $337,266 and a civil monetary penalty of $1,011,800. The Order also imposes permanent trading, solicitation, and registration bans against the Defendants and prohibits them from violating provisions of the Commodity Exchange Act (CEA), as charged.
The Order, entered on November 24, 2014, stems from a CFTC Complaint filed on March 19, 2014, that charged the Defendants with engaging in illegal, off-exchange transactions in precious metals with retail customers on a leveraged, margined, or financed basis (see CFTC Press Release 6884-14).
Specifically, the Order finds that between January 2012 and February 2013, the Defendants offered to enter into, executed, and confirmed the execution of financed gold and silver transactions with persons who were not eligible contract participants as defined by the CEA. The Order further finds that the Defendants introduced 27 customers to AmeriFirst Management, LLC (AmeriFirst), a precious metals wholesaler and clearing firm that financed and purported to confirm the execution of customer precious metals transactions. The Defendants transferred at least $797,577 to AmeriFirst for the purchase of precious metals and received commissions and fees totaling at least $337,266 for the retail financed precious metals transactions executed through AmeriFirst, according to the Order. The Order also finds that Cain was liable, as GDI’s controlling person, for GDI’s violations of the CEA.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, financed transactions such as those conducted by GDI, are illegal off-exchange transactions unless they result in actual delivery of metal within 28 days. According to the Order, the Defendants and AmeriFirst never actually delivered any precious metals to any of the Defendants’ customers.
The CFTC cautions victims that restitution orders may not result in the recovery of money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.
On July 29, 2013, the CFTC, in a separate action in the U.S. District Court for the Southern District of Florida, charged AmeriFirst and its principals with fraud and other violations of the CEA. On September 18, 2013, the court found AmeriFirst and its principals liable for illegal, off-exchange precious metals transactions and fraud, and on, July 24, 2014, the court imposed sanctions of over $35 million against AmeriFirst and its principals (see CFTC Press Releases 6655-13 and 6973-14).
Showing posts with label OFF-EXCHANGE TRANSACTIONS. Show all posts
Showing posts with label OFF-EXCHANGE TRANSACTIONS. Show all posts
Monday, December 8, 2014
Tuesday, April 1, 2014
TWO MEN, COMPANIES ORDERED TO PAY OVER $3.3 MILLION RESTITUTION FOR ROLES IN ILLEGAL PRECIOUS METALS TRANSACTIONS
FROM: COMMODITY FUTURES TRADING COMMISSION
Federal Court Orders Two Florida Men and Their Companies to Pay More than $3.3 Million in Restitution and Penalties to Settle Charges Stemming from Role in Illegal, Off-Exchange Precious Metals Transactions
The CFTC Sued John King and Newbridge Alliance, Inc., and David A. Moore and United States Capital Trust, LLC, in Scheme Orchestrated by Hunter Wise Commodities, LLC
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that on February 26, 2014, Judge Donald M. Middlebrooks of the U.S. District Court for the Southern District of Florida in Miami entered permanent injunction Orders against Florida residents John King and his company Newbridge Alliance, Inc. (Newbridge), and David A. Moore and his company United States Capital Trust, LLC (USCT), who the CFTC sued for their role in a multi-million dollar precious metals scheme orchestrated by Hunter Wise Commodities, LLC and related companies (Hunter Wise) (see related press release 6447-12 and Complaint.)
The Orders require King and Newbridge jointly to pay $750,515 in restitution to their customers and a $1.5 million civil monetary penalty, and Moore and USCT jointly to pay $380,664 in restitution and a $750,000 civil monetary penalty, respectively. The Orders also impose permanent solicitation, trading and registration bans against King, Newbridge, Moore, and USCT, and prohibit them from further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.
The Orders specify that the restitution payments are to be made to Melanie Damian, a court-appointed Special Monitor and Corporate Manager, in the name “Hunter Wise Settlement/Restitution Fund.” The Orders also impose permanent solicitation, trading and registration bans against King, Newbridge, Moore, and USCT, and prohibit them from further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.
The Orders find that from at least July 16, 2011 until February 25, 2013, Newbridge and USCT operated under the ownership and control of King and Moore respectively. Both Newbridge and USCT solicited retail customers to buy physical metals, such as gold, silver, platinum, palladium and copper, and then executed those transactions through Lloyds Commodities and Hunter Wise (see related press releases 6850-14 and 6522-13 and Orders).
According to the Orders, both Newbridge and USCT represented that customers could purchase physical metals for a small down payment (usually 25 percent) and finance the remainder of the purchase with a loan. Newbridge and USCT represented that physical metals were stored in “independent banks” or “federally regulated depositories.” In fact, these representations were false because neither Newbridge nor USCT possessed or had title to any physical metals. Additionally, according to the Orders, both Newbridge and USCT failed to disclose that the overwhelming majority of their customers lost money in connection with these transactions. As a result, Newbridge received over $750,000 in commissions and fees from retail customers, and USCT received over $380,000 in commissions and fees from retail customers, and the Orders require payment of those funds as restitution to customers.
Further, the Orders find that the transactions offered and entered into by Newbridge and USCT were not executed on a board of trade and were therefore illegal.
The CFTC’s litigation continues against Hunter Wise and its principals. The court issued an Order on February 19, 2014, finding that Hunter Wise had no actual metal to deliver to customers, and the Court held a trial on all remaining issues between February 26 and March 4, 2014. No ruling has been entered as of the date of this press release.
The CFTC appreciates the assistance of the Florida Office of Financial Regulation.
The CFTC Division of Enforcement staff members responsible for this case are Carlin Metzger, Heather Johnson, Brigitte Weyls, Jeff Le Riche, Peter Riggs, Thaddeus Glotfelty, Joseph Konizeski, Scott Williamson, Rosemary Hollinger, and Richard B. Wagner.
Federal Court Orders Two Florida Men and Their Companies to Pay More than $3.3 Million in Restitution and Penalties to Settle Charges Stemming from Role in Illegal, Off-Exchange Precious Metals Transactions
The CFTC Sued John King and Newbridge Alliance, Inc., and David A. Moore and United States Capital Trust, LLC, in Scheme Orchestrated by Hunter Wise Commodities, LLC
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that on February 26, 2014, Judge Donald M. Middlebrooks of the U.S. District Court for the Southern District of Florida in Miami entered permanent injunction Orders against Florida residents John King and his company Newbridge Alliance, Inc. (Newbridge), and David A. Moore and his company United States Capital Trust, LLC (USCT), who the CFTC sued for their role in a multi-million dollar precious metals scheme orchestrated by Hunter Wise Commodities, LLC and related companies (Hunter Wise) (see related press release 6447-12 and Complaint.)
The Orders require King and Newbridge jointly to pay $750,515 in restitution to their customers and a $1.5 million civil monetary penalty, and Moore and USCT jointly to pay $380,664 in restitution and a $750,000 civil monetary penalty, respectively. The Orders also impose permanent solicitation, trading and registration bans against King, Newbridge, Moore, and USCT, and prohibit them from further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.
The Orders specify that the restitution payments are to be made to Melanie Damian, a court-appointed Special Monitor and Corporate Manager, in the name “Hunter Wise Settlement/Restitution Fund.” The Orders also impose permanent solicitation, trading and registration bans against King, Newbridge, Moore, and USCT, and prohibit them from further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.
The Orders find that from at least July 16, 2011 until February 25, 2013, Newbridge and USCT operated under the ownership and control of King and Moore respectively. Both Newbridge and USCT solicited retail customers to buy physical metals, such as gold, silver, platinum, palladium and copper, and then executed those transactions through Lloyds Commodities and Hunter Wise (see related press releases 6850-14 and 6522-13 and Orders).
According to the Orders, both Newbridge and USCT represented that customers could purchase physical metals for a small down payment (usually 25 percent) and finance the remainder of the purchase with a loan. Newbridge and USCT represented that physical metals were stored in “independent banks” or “federally regulated depositories.” In fact, these representations were false because neither Newbridge nor USCT possessed or had title to any physical metals. Additionally, according to the Orders, both Newbridge and USCT failed to disclose that the overwhelming majority of their customers lost money in connection with these transactions. As a result, Newbridge received over $750,000 in commissions and fees from retail customers, and USCT received over $380,000 in commissions and fees from retail customers, and the Orders require payment of those funds as restitution to customers.
Further, the Orders find that the transactions offered and entered into by Newbridge and USCT were not executed on a board of trade and were therefore illegal.
The CFTC’s litigation continues against Hunter Wise and its principals. The court issued an Order on February 19, 2014, finding that Hunter Wise had no actual metal to deliver to customers, and the Court held a trial on all remaining issues between February 26 and March 4, 2014. No ruling has been entered as of the date of this press release.
The CFTC appreciates the assistance of the Florida Office of Financial Regulation.
The CFTC Division of Enforcement staff members responsible for this case are Carlin Metzger, Heather Johnson, Brigitte Weyls, Jeff Le Riche, Peter Riggs, Thaddeus Glotfelty, Joseph Konizeski, Scott Williamson, Rosemary Hollinger, and Richard B. Wagner.
Saturday, March 22, 2014
CFTC CHARGES COMPANY, OWNER WITH ILLEGAL, OFF-EXCHANGE TRANSACTIONS
FROM: COMMODITY FUTURES TRADING COMMISSION
CFTC Charges Florida-Based Gold Distributors Inc. and Its Owner, Jordan Cain, with Engaging in Illegal, Off-exchange Commodity Transactions
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that it filed a civil injunctive enforcement action in the U.S. District Court for the Southern District of Florida against Defendants Gold Distributors Inc. (GDI) of Hallandale Beach, Florida, and its sole owner, Jordan Cain of Miami, Florida. The CFTC Complaint charges the Defendants with engaging in illegal, off-exchange financed transactions in precious metals with retail customers.
According to the Complaint, between January 2012 and February 2013, GDI and Cain solicited retail customers by telephone and in person to buy physical precious metals, such as gold and silver, in off-exchange leverage transactions. Customers paid GDI a portion of the purchase price for the metals, and another entity, AmeriFirst Management, LLC (AmeriFirst), financed the remainder of the purchase price, while charging the customers interest on the amount they purportedly loaned to customers, the Complaint alleges.
Retail customers engaging in financed transactions with GDI were told that they were borrowing money to purchase precious metals, according to the Complaint. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank), financed transactions such as those conducted by GDI, are illegal off-exchange transactions unless they result in actual delivery of metal within 28 days. The Complaint alleges that GDI’s customers never took delivery of the precious metals they purportedly purchased.
The Complaint further alleges that when GDI engaged in these illegal transactions it was acting as a dealer for metals merchant AmeriFirst, which the CFTC charged with fraud and other violations in federal court in Florida on July 30, 2013 (see CFTC Press Release 6655-13). As alleged in the CFTC Complaint against AmeriFirst and the Complaint in this case, neither GDI nor AmeriFirst purchased or held metal on the customers’ behalf. The Complaint alleges that Defendants’ customers thus never owned, possessed, or received title to the physical commodities that they believed they purchased. Cain, as the owner, operator and controlling person of GDI, is liable for GDI’s violations of the Commodity Exchange Act and CFTC Regulations, according to the Complaint.
In its continuing litigation, the CFTC seeks disgorgement of ill-gotten gains, restitution for the benefit of defrauded customers, civil monetary penalties, permanent registration and trading bans, and a permanent injunction from future violations of federal commodities laws, as charged.
CFTC Division of Enforcement staff members responsible for this action are Nathan B. Ploener, Christopher Giglio, Lenel Hickson, Jr., and Manal M. Sultan.
CFTC Charges Florida-Based Gold Distributors Inc. and Its Owner, Jordan Cain, with Engaging in Illegal, Off-exchange Commodity Transactions
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that it filed a civil injunctive enforcement action in the U.S. District Court for the Southern District of Florida against Defendants Gold Distributors Inc. (GDI) of Hallandale Beach, Florida, and its sole owner, Jordan Cain of Miami, Florida. The CFTC Complaint charges the Defendants with engaging in illegal, off-exchange financed transactions in precious metals with retail customers.
According to the Complaint, between January 2012 and February 2013, GDI and Cain solicited retail customers by telephone and in person to buy physical precious metals, such as gold and silver, in off-exchange leverage transactions. Customers paid GDI a portion of the purchase price for the metals, and another entity, AmeriFirst Management, LLC (AmeriFirst), financed the remainder of the purchase price, while charging the customers interest on the amount they purportedly loaned to customers, the Complaint alleges.
Retail customers engaging in financed transactions with GDI were told that they were borrowing money to purchase precious metals, according to the Complaint. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank), financed transactions such as those conducted by GDI, are illegal off-exchange transactions unless they result in actual delivery of metal within 28 days. The Complaint alleges that GDI’s customers never took delivery of the precious metals they purportedly purchased.
The Complaint further alleges that when GDI engaged in these illegal transactions it was acting as a dealer for metals merchant AmeriFirst, which the CFTC charged with fraud and other violations in federal court in Florida on July 30, 2013 (see CFTC Press Release 6655-13). As alleged in the CFTC Complaint against AmeriFirst and the Complaint in this case, neither GDI nor AmeriFirst purchased or held metal on the customers’ behalf. The Complaint alleges that Defendants’ customers thus never owned, possessed, or received title to the physical commodities that they believed they purchased. Cain, as the owner, operator and controlling person of GDI, is liable for GDI’s violations of the Commodity Exchange Act and CFTC Regulations, according to the Complaint.
In its continuing litigation, the CFTC seeks disgorgement of ill-gotten gains, restitution for the benefit of defrauded customers, civil monetary penalties, permanent registration and trading bans, and a permanent injunction from future violations of federal commodities laws, as charged.
CFTC Division of Enforcement staff members responsible for this action are Nathan B. Ploener, Christopher Giglio, Lenel Hickson, Jr., and Manal M. Sultan.
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