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Case Status Report: Hunter Wise and Metals Dealers in Florida

  • CASE STATUS REPORT: HUNTER WISE AND ITS METALS DEALERS IN FLORIDA

    FEDERAL COURT IN FLORIDA ENTERS PRELIMINARY INJUNCTION ORDER AGAINST HUNTER WISE COMMODITIES, LLC, LLOYDS COMMODITIES, LLC, AND 18 OTHER DEFENDANTS IN CONNECTION WITH OPERATING A MULTI-MILLION DOLLAR FRAUDULENT PRECIOUS METALS SCHEME

    Court Freezes Defendants’ Assets and Appoints Special Corporate Monitor for Corporate Defendants

    Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that on February 22, 2013 the Honorable Donald M. Middlebrooks of the U.S. District Court for the Southern District of Florida, entered a Preliminary Injunction Order against Defendants Hunter Wise Commodities, LLC; Hunter Wise Services, LLC; Hunter Wise Credit, LLC; Hunter Wise Trading, LLC; Lloyds Commodities, LLC; Lloyds Commodities Credit Company, LLC; Lloyds Services, LLC; C.D. Hopkins Financial, LLC; Hard Asset Lending Group, LLC; Blackstone Metals Group, LLC; Newbridge Alliance, Inc.; United States Capital Trust, LLC; Harold Edward Martin, Jr.; Fred Jager; James Burbage; Frank Gaudino; Baris Keser; Chadewick Hopkins; John King; and David A. Moore that prohibits the Defendants from offering investments in physical metals to the retail public.

    The Court’s Order stems from the CFTC’s December 5, 2012 Complaint charging the Defendants with fraudulently soliciting and accepting at least $46 million from hundreds of customers since July 2011 to invest in physical precious metals, such as gold, silver, platinum, palladium, and copper.  (See CFTC Press Release 6447-12, December 5, 2012).  According to the CFTC Complaint, the Defendants claim to sell physical metals to customers who make a down payment on the amount of physical metals they wish to buy, usually 25 percent of the total purchase price.  Defendants allegedly claim to arrange loans for the balance of the purchase price, and advise customers that their physical metals will be stored in a secure depository. The Complaint alleges that these statements were false because the Defendants do not own, purchase or store any metal for their customers, and that the Defendants cheat and defraud customers by charging customers interest on loans which are never made, and storage and insurance fees on metals that do not exist.  In addition, the Complaint alleges that the offering of these investments in physical metals constitute illegal, off-exchange retail commodity contracts in violation of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). 

    Following a hearing on February 22, 2013, Judge Middlebrooks found that the CFTC had shown a likelihood of success in proving the allegations of the Complaint.  In an Order issued on February 25, Judge Middlebrooks described Hunter Wise as “the conductor of th[e] orchestra, with the other Defendants playing instruments at Hunter Wise’s direction.”  According to the Order, Hunter Wise provided reports to customers which were misleading because they created the “illusion that actual commodities are being transferred into or out of their accounts, when in reality, no real metals are being transferred as a result of the transaction.”  According to the Order “Hunter Wise does not actually buy, sell, loan, store, or transfer physical metals in connection with these retail commodity transactions.  Instead, Hunter Wise records and tracks customer orders and trading positions, and then manages its exposure to these retail customer trading positions by using the customer’s funds to trade derivatives – such as futures, forwards and rolling spot contracts – in its own margin trading accounts.”

    The Court’s Order prohibits the Defendants from trading, soliciting orders, committing fraud or engaging in business activity related to contracts or transactions regulated by the CFTC.  In its continuing litigation against the Defendants, the CFTC is seeking a permanent civil injunction, in addition to other remedial relief, including restitution to customers.

    Information Related to Investments in Metals with Hunter Wise and its Metals Dealers in Florida

    Please check this page periodically for the latest information regarding the CFTC’s Civil Complaint against Hunter Wise Commodities, LLC, Hunter Wise Services, LLC, Hunter Wise Credit, LLC, Hunter Wise Trading, LLC, Lloyds Commodities, LLC, Lloyds Commodities Credit Company, LLC, Lloyds Services, LLC, C.D. Hopkins Financial LLC, Hard Asset Lending Group, LLC, Blackstone Metals Group, LLC, Newbridge Alliance, Inc., United States Capital Trust, LLC, Harold Edward Martin, Jr., Fred Jager, James Burbage, Frank Gaudino, Baris Keser, Chadewick Hopkins, John King, and David A. Moore, filed on December 5, 2012, in the United States District Court, Southern District of Florida.

    COURT DOCUMENTS

    Complaint Against Hunter Wise Commodities, LLC, et al.
    Filed by the Commodity Futures Trading Commission, 12/5/2012

    Memorandum of the Commodity Futures Trading Commission in Support of Its Motion for Preliminary Injunction
    Filed by the Commodity Futures Trading Commission, 12/6/2012

    Order Temporarily Appointing Special Corporate Monitor over Corporate Defendants
    Filed, 2/22/2013

    Order Granting Motion of Commodity Futures Trading Commission for Preliminary Injunction
    Filed, 2/25/2013

    COURT APPOINTED MONITOR INFORMATION

    Investors with questions related to the CFTC’s Complaint against the above entities and individuals can call or visit the Court Appointed Monitor at:

    Melanie Damian

                    Damian & Valori, LLP

                    Telephone: 305-542-4410

                    247 SW 8th St.

    P.O. BOX 816,

    Miami, FL 3313

    www.dvllp.com

    hunterwisemanager@dvllp.com

    CFTC CONTACT INFORMATION

    Investors with questions related to the CFTC’s Complaint against the above entities and individuals can also call the CFTC by telephone at: (312) 596-0608 or via e-mail at metalsinvestors@cftc.gov

    RELATED NEWS RELEASES

    Press Release: CFTC Charges Hunter Wise Commodities, Lloyds Commodities, C.D. Hopkins Financial, United States Capital Trust, Newbridge Alliance, Blackstone Metals Group, and their Principals in Multi-Million Dollar Fraudulent Precious Metals Scheme.

    December 5, 2012

    ___________

    Commission staff has prepared this page to provide information for customers of Hunter Wise Commodities, LLC, Hunter Wise Services, LLC, Hunter Wise Credit, LLC, Hunter Wise Trading, LLC, Lloyds Commodities, LLC, Lloyds Commodities Credit Company, LLC, Lloyds Services, LLC, C.D. Hopkins Financial LLC, Hard Asset Lending Group, LLC, Blackstone Metals Group, LLC, Newbridge Alliance, Inc., and United States Capital Trust, LLC. The page will be updated as further information becomes available.

    Last Updated: February 26, 2013

    Last Updated: March 5, 2013



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