For Release: November 8, 2006
Washington, D.C.— The U.S. Commodity Futures Trading Commission (CFTC) announced today that on October 31, 2006, the United States District Court for the Southern District of Florida entered an order permanently enjoining G7 Advisory Services, LLC (G7 Advisory) of Boca Raton, Florida, and Michel Geraud (also known as Mike Jeraux) of Pompano Beach, Florida, from, among other things, engaging in any commodity-related activity, including but not limited to commodity trading and soliciting customers to invest in commodity futures and options.
The court’s order stems from a complaint filed by the CFTC on April 12, 2005 (see CFTC News Release 5069-05, April 18, 2005).
The order finds that, from at least May 2004 to at least January 2005, defendants fraudulently solicited nearly $2.1 million from at least 136 retail customers in and outside the United States to invest in options on foreign currency (forex). The fraud included misrepresenting the profit potential and risk involved in trading forex options, as well as misrepresenting the level of trading experience of G7 Advisory employees.
Specifically, according to the order, Geraud told one potential customer that numerous clients had tripled or quadrupled their money, despite the fact that every G7 Advisory customer closed their account with a loss. Meanwhile, G7 Advisory generated at least $1.3 million in commissions and fees.
The order requires G7 Advisory to pay $2.1 million in restitution and a $1.5 million civil monetary penalty. Geraud, the controlling person of G7 Advisory responsible for the day-to-day operations of the firm, is jointly and severally liable for the restitution in the amount $500,000, and individually liable for a $250,000 civil monetary penalty. The order also imposes on all defendants a permanent ban on all commodity-related activity.
The following CFTC Division of Enforcement staff were responsible for this action: Rachel Entman, Michael J. Otten, Jason Gizzarelli, Gretchen Lowe, and Lacey Dingman.
Last Updated: April 22, 2010