For Release: May 21, 2007
Washington, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced that the Honorable Lewis A. Kaplan, U.S. District Court Judge for the Southern District of New York, entered a default order against defendants American Energy Exchange (AMENX) and York Commodities (York) requiring them to pay $3,262,788.70 in restitution to victims of their fraud, jointly and severally, and imposing a $260,000 civil monetary penalty against AMENX and a $130,000 penalty against York.
The court entered an order for default judgment on May 7, 2007, resolving charges against AMENX and York for violating the Commodity Exchange Act. The charges arise from the CFTC’s complaint in CFTC v. American Energy Exchange, et al., 06 CV 7017 (S.D.N.Y.) (see CFTC Press Release 5228-06, September 18, 2006).
Specifically, the order finds that York solicited customers to trade options on energy futures contracts with AMENX by fraudulently inducing customers to believe that: (1) AMENX is a futures exchange; (2) York is its broker; and (3) both are located in the United States. York leased the use of a fax number with a New York area code to fraudulently substantiate its representations as a United States-based company. Likewise, as part of the fraud to deceive customers that it was a reputable commodity futures exchange, AMENX listed firms as members of AMENX on its website when, in fact, none were members, and none had ever heard of AMENX. Once the customers were solicited, they were advised that they had opened an online trading account on AMENX, which they could access through the AMENX website and were instructed to wire their funds to bank accounts located in Hong Kong and Germany.
The order states that customers were promised substantial profits when, in fact, customers lost nearly all of the money they invested. Customers of York and AMENX, for example, lost more than $3,262,788.70.
The order also enters a permanent injunction against AMENX and York that prohibits them from engaging in any business activities related to commodity futures and options trading.
Defendant York Commodities is unrelated to the York Commodities located in Scarsdale, New York, and the York Commodities, Inc., located in York, Nebraska.
The CFTC wishes to thank the Australian Securities and Investment Commission, the Hong Kong Securities and Futures Commission, the Swiss Federal Banking Commission, the German Bundesanstalt für Finanzdienstleistungsaufsicht, the Dubai Financial Services Authority, the Dubai Police, the Malaysian Securities Commission, the Ontario Securities Commission, the Monetary Authority of Singapore, and the Thailand Securities and Exchange Commission.
The following CFTC Division of Enforcement staff members are responsible for this case: David Oakland, Philip Rix, Nathan Ploener, Manal Sultan, Lenel Hickson, Stephen J. Obie, Richard Wagner, and Vincent McGonagle.
Last Updated: May 23, 2007