For Release: May 30, 2007
Washington, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today that the Honorable Adalberto Jordan of the U.S. District Court of the Southern District of Florida entered an order against Ft. Lauderdale area-resident Steven Labell and his companies Global Atlantic Management LLC, doing business as Worldwide Forex, Inc. and Worldwide Commodity Corp. (collectively WWF), settling charges that they fraudulently solicited customers to purchase foreign currency (forex) futures contracts.
The consent order of permanent injunction was entered on May 21, 2007, and stems from a CFTC complaint filed on June 21, 2004 (see CFTC News Release 4944-04, June 29, 2004).
Defendants Fraudulently Solicited More than $2.8 Million From At Least 241 Customers, Who Lost Substantially All of Their Funds
The order finds that, since at least April 2002, Labell and WWF induced customers to buy and sell forex contracts by knowingly making false and misleading representations through fraudulent solicitations via radio and through telephone calls by WWF brokers. The defendants fraudulently solicited more than $2.8 million from at least 241 customers and all but one of WWF's customers lost substantially all of their investments.
Specifically, Labell controlled WWF, exercised supervisory authority, and actively participated in the day-to-day business operations, serving at various times as vice-president, president, and director. Also, according to the order, Labell and WWF employed brokers who made unsolicited calls and urged customers to open forex accounts by misrepresenting the likelihood that a customer would realize large profits. Labell personally prepared materially misleading sales scripts for use by his brokers. The sales scripts misrepresented the urgency of investing by convincing customers to make immediate investments so as not to miss fleeting opportunities to make a lot of money. WWF brokers misrepresented the substantial risks involved in trading forex and misrepresented WWF's abysmal performance record trading forex for its customers.
The order holds Labell and WWF jointly and severally liable to pay WWF's customers restitution in the following amounts: WWF $3.1 million and Labell $1.5 million. The order also imposes civil monetary penalties of $126,000 against Labell and $3.1 million against WWF. Finally, the order permanently prohibits defendants from engaging, directly or indirectly, in any commodity-related activity.
In a previous action brought by the CFTC against Labell, various named individual defendants, and two corporate entities, including Worldwide Commodity Corporation, the Honorable Anita B. Brody of the United States District Court for the Eastern District of Pennsylvania entered a consent order on September 20, 2006 imposing numerous sanctions and assessing more than $14.7 million in monetary penalties (see CFTC News Release 5242-06, October 6, 2006).
The following CFTC staff members were responsible for the Labell and WWF case: David Acevedo, Judith M. Slowly, Michael R. Berlowitz, Stephen J. Obie, Lenel Hickson, Jr., Lacey Dingman, and Richard B. Wagner.
Last Updated: July 2, 2007