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Articles Posted in Commodities (CFTC)

In financial industry, two of the principal agencies tasked with ensuring the U.S. financial markets’ stability and integrity are the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC). The CFTC ensures that commodity futures and options exchanges have policies that protect investors in the market and ensure fair trading free from fraud and manipulation. CFTC & SEC Whistleblower Programs In 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which established whistleblower programs for the SEC and the CFTC. Whistleblowers that report securities violations to the SEC or CFTC can receive a percentage of any recovery the government collects over $1 million in enforcement actions. Collections can include fines, disgorgement of ill-gotten gains, and restitution. The percentage of a whistleblower award can be anywhere from 10% to 30% depending on the information and assistance the whistleblower provides, the significance of the information, and whether the award will deter future fraud or violations.In financial industry, two of the principal agencies tasked with ensuring the U.S. financial markets’ stability and integrity are the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC). The CFTC ensures that commodity futures and options exchanges have policies that protect investors in the market and ensure fair trading free from fraud and manipulation. Continue reading ›

The Commodities Futures Trading Commission (CFTC) Whistleblower Office has issued an alert to the public regarding how people can make themselves eligible for financial awards and protections while helping to stop violators of the Bank Secrecy Act (BSA). The CFTC Whistleblower Program will pay 10%-30% of monetary rewards to eligible persons who provide original information about violations, if that information leads to a successful action that results in over $1 million in monetary sanctions. The CFTC Whistleblower program has been successful and millions have been awarded.The Commodities Futures Trading Commission (CFTC) Whistleblower Office has issued an alert to the public regarding how people can make themselves eligible for financial awards and protections while helping to stop violators of the Bank Secrecy Act (BSA).

The CFTC Whistleblower Program will pay 10%-30% of monetary rewards to eligible persons who provide original information about violations, if that information leads to a successful action that results in over $1 million in monetary sanctions. The CFTC Whistleblower program has been successful and millions have been awarded. Continue reading ›

Boca-Raton-Oppenheimer-Employees-Settle-SEC-Investigation-300x208The CFTC, along with the Utah Department of Commerce, Division of Securities, through its Attorney General, jointly filed a civil enforcement action in the U.S. District Court for the District of Utah, Central Division. They filed against Gaylen Dean Rust and his business Rust Rare Coin (RRC). The complaint charges Rust and his company with committing fraud against approximately 200 individuals from Utah, and also from 16 other states. Rust allegedly obtained more than $170 million from investors since May 2013 in a precious metals ponzi scheme.

The complaint states that Rust’s fraudulent actions are ongoing. From January to August of 2018, Rust received $42 million from investors, which he claimed he used to buy and sell silver. He also allegedly attempted to solicit new investors recently.

On November 15, 2018, the U.S. District Court Judge for the District of Utah, Honorable Tena Campbell, entered a restraining order to freeze Rust’s assets and to permit the CFTC and State of Utah to inspect his records. Jonathan O. Hafen was appointed as a temporary receiver to take control of RRC and Rust’s assets.

Fabio Bretas de Freitas of Miami, Florida, was arrested on fraud and identity theft charges for allegedly misappropriating more than $5.5 million. His potential convictions involve the two investment companies he managed; Phynance Capital Management LLC and Absolute Experience LLC.Fabio Bretas de Freitas of Miami, Florida, was arrested on fraud and identity theft charges for allegedly misappropriating more than $5.5 million. He also allegedly attempted to deceive federal regulators and he impersonated a victim-investor.

The 53-year-old was taken into custody on December 6 and was then scheduled to appear before a magistrate judge.

“The defendant obtained more than $5.5 million from people who invested their money in good faith. But as alleged, instead of investing those funds as he had promised, the defendant used it to cover his own personal expenses, even going so far as to impersonate one of his own victims to deceive investigators,” said William F. Sweeney Jr., the assistant director in charge of the New York Field Office of the FBI.  “Bretas’ arrest should serve as a stark reminder that those who seek to manipulate our financial systems for their personal gain will be identified and disrupted.”

Class-Action-1-300x150-300x150A putative class of investors sued JPMorgan Chase & Co. and a group of precious metals traders employed by the bank in New York federal court Wednesday, saying they manipulated futures contracts through spoofing, days after the U.S. Department of Justice announced a former trader had pled guilty to his role in the alleged scheme.

The complaint accuses JPMorgan and its employees of manipulating the prices of precious metals futures contracts on the New York Mercantile Exchange and Commodity Exchange Inc. through a spoofing scheme where its traders would place orders for futures contracts with the intent to cancel those orders before execution, which would cause investors to buy and sell at artificial prices.

According to the complaint, JPMorgan, Edmonds and several unnamed employees orchestrated a scheme “to inject materially false and illegitimate signals of supply and demand into the market and … to induce other market participants to trade against” the orders that were placed by the defendants, which resulted in the investors trading at prices, quantities and times that they may have not traded at or during that timeframe.

iStock-476534078-300x231OptionSellers.Com, operated by James Cordier and Michael Gross, promoted themselves as expert options traders able to manage money for retail investors promising they can produce consistent returns with limited risk.  From offices in Tampa, Florida, Cordier and Gross touted their book “The Complete Guide to Options Selling” claiming to know “how selling options can lead to stellar returns in bull and bear markets.”

Now, OptionSellers.Com website has gone dark, and INTL FCStone, the commodities firm which maintained the customer accounts and managed the risk for loans and margin, claims that many investors owes them millions of dollars.  Investors are wondering how INTL FCStone and OptionSellers.Com lost all the money.

While money was lost on naked options, investors allege that either OptionSellers.Com or INTL FCStone failed:

iStock-476534078-300x231Silver Law Group has been retained by investors to pursue claims against INTL FCStone for losses related to OptionSellers.Com. Our clients allege that OptionSellers.Com used a web of deceptive marketing materials, misrepresentation and deception to promote a speculative trading strategy which resulted in devastating losses.  INTL FCStone allegedly allowed OptionSellers.Com to trade customer accounts including IRA accounts on margin or purchase naked options which caused losses greater than their principal investment. Further allegations relate to FCStone’s knowledge of OptionSellers’ activities and misrepresentations.

In late November 2018, OptionSellers.Com and INTL FCStone informed investors that despite previous representations regarding the safety and security of their investments, many investors had lost almost all of their investment and many investors owed additional margin calls.  James Cordier has offered his victims a video apology, but many investors are shocked to learn about his regulatory history and lack of institutional knowledge regarding options trading.

Our Experienced Commodities Fraud Attorneys 

It seemed like a great investment, in natural gas. But like many energy-based investments, there is a considerable volatility involved that’s an uncontrollable variable. In other words, you never know what may happen tomorrow, especially when trading options or using leverage.

Natural gas posted its biggest one-day percentage gain on November 14. The next day, it posted its largest one-day drop in 15 years. According to news stories, OptionSellers.com was betting that natural gas would continue to rise. When it didn’t, everything unraveled, and the company was forced to begin liquidation. Many investors borrowed through margin accounts, some with considerable amounts invested.

Margin-Account-Guidelines-300x200Tampa, FL-based OptionSellers.com was a commodities trading firm that claimed to be experienced in this type of investment. The firm’s president and head trader, James Cordier, told a recent interviewer, “Our goal is to take an aggressive vehicle and manage it conservatively.” Unfortunately, that’s not exactly what happened. Trading “naked” on margin instead of “covered,” the firm left its investors vulnerable to unlimited exposure, leading to the losses. An article explains that “OptionSellers.com and its principals negligently engaged in a risky trading strategy that was unsuitable for its clients and breached its fiduciary duties to them by putting its interests ahead of its clients.”

https://www.silverlaw.com/blog/wp-content/uploads/2017/07/FINRA-Permanently-Bars-Honetta-C.-Kao-After-Allegations-of-Unauthorized-Trading-and-Mishandled-Accounts-300x200.jpgThe Commodity Futures Trading Commission (CTFC) filed orders today that brought and settled cases against two commodities firms engaged in unauthorized trading and two traders attempting to manipulate commodity prices.

In the first case, Iowa-based Kooima & Kaemingk Commodities, Inc. (K&K), Lauren Kaemingk (Kaemingk), and Bradley Kooima (Kooima) were charged with:

  • Fraud

Our investment fraud attorneys help victims of precious metal and exotic diamond frauds by con artists who promise quick profits from investing in rare diamonds or other exotic gems. Investors should be wary of any aggressive sales tactics or violations of state or federal securities laws.Bahram-Mirhashemi-Facing-Allegations-of-Elder-Financial-Fraud-300x200-300x200

Possible Fraudulent Sales Pitch Include: 

  • Current news already known to the public such as:
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