For Release: August 9, 2006
Washington, D.C.— The U.S. Commodity Futures Trading Commission (CFTC) announced today that the U.S. District Court for the Southern District of Florida found that William David Seigler, Jr., of Largo, Florida, and his company, Sonoma Trading Corporation (Sonoma) violated the provisions of the Commodity Exchange Act (CEA) prohibiting off-exchange foreign currency (forex) option transactions and requiring registration as a futures commission merchant (FCM). The court entered a judgment by default and order of permanent injunction requiring defendants to pay a $500,000 civil monetary penalty.
The court’s order arises from a CFTC complaint filed in 2005 that alleged, and the Court entered findings, that, among other things, the defendants, from or about December 30, 2002, solicited the public in Florida and throughout the United States through the Sonoma internet website www.SonomaTrading.com to speculate in “the up and down price movements within the global currency markets” by purchasing forex options through the defendants. (See CFTC Press Release 5056-05, March 15, 2005.)
Through the website, the defendants instructed clients to wire funds to a U.S. based bank -- that acted as a conduit -- for the purpose of transferring funds to an account held by Sonoma at a bank in San Jose, Costa Rica. Neither defendant was registered with the Commission in any capacity or designated by the Commission as a contract market or derivatives transactions execution facility. Consequently, the defendants were found by the court to have offered illegal off-exchange options contracts and to have failed to register as a futures commission merchant, both in violation of the CEA and CFTC regulations.
The following Division of Enforcement staff was responsible for this case: Timothy J. Mulreany, David Reed, Mary Kaminski, Paul Hayeck, and Joan Manley.
Last Updated: April 22, 2010