UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF NORTH CAROLINA

_______________________________________________________
)
COMMODITY FUTURES TRADING COMMISSION, ) Case No. 3:00CV103-V
Plaintiff, )
)
v. )
)
IBS, INC. (A NORTH CAROLINA CORP.), ) FILED UNDER SEAL
IMC TRADING, INC. (A NORTH CAROLINA CORP.), )
IMC TRADING, INC. (AN ARIZONA CORP.), )
IMC TRADING, INC. (A NEVADA CORP.), )
JOE MILLER COMPANY D/B/A IMC TRADING )
(A CALIFORNIA CORP.), )
MAZUMA TRADING GROUP, INC. D/B/A PINPOINT )
MARKETING LTD. (A FLORIDA CORPORATION) )
ALAN STEIN, )
JOSEPH FINATERI, and )
MICHAEL TEMPLE, )
)
Defendants, )
)
INTERNATIONAL BULLION SERVICES )
(BAHAMAS), INC. (A BAHAMAS CORP.), )
KIMBERLYNN CREEK RANCH, INC. )
(A CALIFORNIA CORP.), )

KINGSFIELD RACING, INC. (A NEVADA CORP.),

)
F. X. & B., L.L.C. (A NEVADA CORP.), )
A.J.S. ENTERPRISES, INC. (A NEVADA CORP.), )
SAMUEL KINGSFIELD, and )
PAMELA KINGSFIELD, )
)
Relief Defendants. )
_______________________________________________________ )

COMPLAINT FOR PERMANENT INJUNCTION

AND OTHER EQUITABLE RELIEF

I. SUMMARY

1. Since February 1999, Alan Stein ("Stein"), Joseph Finateri ("Finateri") and Michael Temple ("Temple") have fraudulently telemarketed illegal futures contracts for precious metals and other commodities from their North Carolina offices. Two North Carolina firms, IBS, Inc. ("IBS-NC") and Mazuma Trading Group, Inc. d/b/a Pinpoint Marketing Ltd. ("Pinpoint"), are the latest incarnation of a nationwide scheme that the defendants have perpetrated since at least 1992 through a series of corporate shells -- defendants Joe Miller Company d/b/a IMC Trading, Inc. (a California corporation) ("IMC-CA"), IMC Trading, Inc. (a Nevada corporation) ("IMC-NV"), IMC Trading, Inc. (an Arizona corporation) ("IMC-AZ"), IMC Trading, Inc. (a North Carolina corporation) ("IMC-NC"), Pinpoint and IBS-NC -- all of which are hereinafter referred to as the "IMC Common Enterprise."

2. The defendants have attempted to keep their current whereabouts a secret. In an elaborate ruse, the defendants claim that they are currently operating out of the Bahamas, instruct customers to call them at a Bahamas telephone number and to send investment checks to a Bahamas address, and send account statements from the Bahamas. In reality, the defendants' supposed Bahamas location is nothing more than a private mailbox and answering service, and the defendants actually operate from Charlotte, North Carolina. Some customers' investment funds that were sent to the defendants' Bahamas address have been funneled and deposited into an IBS-NC bank account in North Carolina.

3. Regardless of the corporate name or location, the defendants' scheme has remained the same. Through telemarketing sales calls, the defendants have solicited members of the public to purchase futures contracts for precious metals and other commodities by making false claims regarding the profits customers would likely achieve by purchasing defendants' futures contracts and the profits that they would have achieved if they had purchased defendants' futures contracts at an earlier time. The Defendants also have failed to apprise customers of the substantial risk of loss associated with purchasing their futures contracts. These materially false representations and omissions made by the defendants violate Section 4b(a)(i)-(iii) of the Commodity Exchange Act, as amended (the "Act"), 7 U.S.C. 6b(a)(i)-(iii) (1994) ("Section 4b(a)(i)-(iii)"). Moreover, Stein and Finateri, as the controlling persons of the IMC Common Enterprise, are liable for its violations of Section 4b(a)(i)-(iii), pursuant to Section 13(b) of the Act, 7 U.S.C. 13c(b) ("Section 13(b)").

4. Because the futures contracts marketed by the defendants are not consummated on or subject to the rules of a contract market designated by the Commodity Futures Trading Commission (the "Commission"), defendants have violated section 4(a) of the Act, 7 U.S.C. 6(a) (1994) ("Section 4(a)"). Moreover, Stein and Finateri, as controlling persons of the IMC Common Enterprise, are liable for its violations of Section 4(a) pursuant to Section 13(b) of the Act.

5. A substantial amount of the funds the IMC Common Enterprise has received from customers has been transferred to relief defendants Kingsfield Racing, Inc., Kimberlynn Creek Ranch, Inc., AJS Enterprises, Inc., FX & B, L.L.C., Samuel Kingsfield and Pamela Kingsfield, none of whom perform any known, bona fide service for the IMC Common Enterprise. These relief defendants hold funds and assets in constructive trust for the benefit of the IMC Common Enterprise customers. Relief defendant International Bullion Services (Bahamas), Inc. purports to finance customers' purchases of futures contracts and purchase and store commodities and is a custodian of customer funds and/or assets.

6. Accordingly, pursuant to Section 6c of the Act, 7 U.S.C. 13a-1, the Commission brings this action to enjoin the defendants' unlawful acts and practices and to compel their compliance with the Act. In addition, the Commission seeks disgorgement of defendants' ill-gotten gains, rescission of their unlawful futures contracts, restitution to customers, civil monetary penalties, and such other relief as the Court may deem necessary or appropriate. The Commission further seeks disgorgement of the funds and assets of the IMC Common Enterprise or its customers that have been transferred to the relief defendants.

7. Unless restrained and enjoined by this Court, defendants are likely to and will continue to engage in the acts and practices alleged in this Complaint and in similar acts and practices, as more fully described below. Moreover, absent the requested ancillary monetary relief, the Commission will be unable to obtain complete relief.

II. JURISDICTION AND VENUE

8. The Act establishes a comprehensive system for regulating the purchase and sale of commodity futures contracts and options. This Court has jurisdiction over this action pursuant to Section 6c of the Act, 7 U.S.C. 13a-1 (1994), which provides that whenever it shall appear to the Commission that any person has engaged, is engaging, or is about to engage in any act or practice constituting a violation of any provision of the Act or any rule, regulation, or order promulgated thereunder, the Commission may bring in the proper U.S. District Court an action against such person to enjoin such practice or to enforce compliance with the Act.

9. Venue properly lies with this Court pursuant to Section 6c(e) of the Act, 7 U.S.C. 13a-1(e), because the defendants are found in, inhabit, or transact business in this District, and the acts and practices in violation of the Act have occurred, are occurring, or are about to occur within this District, among other places.

III. THE PARTIES

A. The Plaintiff

10. The Commission is an independent federal regulatory agency which is charged with the administration and enforcement of the Act. 7 U.S.C. 1 et. seq.

B. The Defendants

11. IBS, Inc. ("IBS-NC") is a North Carolina corporation with its principal place of business located at 9809 Emerald Point Drive, Charlotte, North Carolina, 28278. IBS-NC is part of the IMC Common Enterprise. The IMC Common Enterprise transacts business within the Western District of North Carolina.

12. IMC Trading, Inc. ("IMC-NC") is a North Carolina corporation that has received correspondence at 7816 Fairview Road, Suite 219, Charlotte, North Carolina, 28226. IMC-NC is part of the IMC Common Enterprise. The IMC Common Enterprise transacts business within the Western District of North Carolina.

13. Mazuma Trading Group, Inc. d/b/a Pinpoint Marketing Ltd. ("Pinpoint") is a Florida corporation with its principal place of business located at 6060 JA Jones Drive, Charlotte, North Carolina, 28226. Pinpoint is part of the IMC Common Enterprise. The IMC Common Enterprise transacts business within the Western District of North Carolina.

14. IMC Trading, Inc. ("IMC-AZ") is an Arizona corporation that has received correspondence at 1110 South Alma School, Suite 5-280, Mesa, Arizona, 85210. IMC-AZ is part of the IMC Common Enterprise. The IMC Common Enterprise transacts business within the Western District of North Carolina.

15. IMC Trading, Inc. ("IMC-NV") is a Nevada corporation which was located at 2235 East Flamingo Blvd, Suite 113, Las Vegas, Nevada, 89109. IMC-NV has received correspondence at 4001 South Decatur Boulevard, Suite 432, Las Vegas, Nevada, 89103. Each year from 1995 through 1998, IMC-NV filed telemarketer registration applications with the Nevada Consumer Affairs Division of the Department of Business and Industry. IMC-NV is part of the IMC Common Enterprise. The IMC Common Enterprise transacts business within the Western District of North Carolina.

16. Joe Miller Company d/b/a/ IMC Trading ("IMC-CA") is a California corporation that has received correspondence at 1875 Century Park East, Suite 1400, Los Angeles, California, 90067. Each year from 1992 through 1994, IMC-CA filed telemarketer registration applications with the Telephonic Seller Unit for the California Department of Justice. IMC-CA is part of the IMC Common Enterprise. The IMC Common Enterprise transacts business within the Western District of North Carolina.

17. Alan Stein is an individual who transacts business at 9809 Emerald Point Drive, Charlotte, North Carolina, 28278. Stein resides in Ft. Mill, South Carolina, which is located approximately twenty miles from Charlotte, North Carolina. Stein is a controlling person of the IMC Common Enterprise. At all times material to this Complaint, acting alone or in concert with the other defendants, Stein has formulated, directed, controlled, or participated in the illegal acts or practices described in the Complaint.

18. Joseph Finateri is a telemarketer for the IMC Common Enterprise and transacts business at 9809 Emerald Point Drive, Charlotte, North Carolina, 28278. Finateri resides in Ft. Mill, South Carolina, which is located approximately twenty miles from Charlotte, North Carolina. Finateri is also a controlling person of the IMC Common Enterprise. At all times material to this Complaint, acting alone or in concert with the other defendants, Finateri has formulated, directed, controlled, or participated in the illegal acts or practices described in the Complaint.

19. Michael Temple is a telemarketer for the IMC Common Enterprise and transacts business at 9809 Emerald Point Drive, Charlotte, North Carolina, 28278. Temple resides in Charlotte, North Carolina. At all times material to this Complaint, acting alone or in concert with the other defendants, Temple has participated in the illegal acts or practices described in the Complaint.

20. None of the corporate defendants has ever been designated by the Commission as a contract market for the trading of precious metals or any other commodities. Nor has any defendant ever been registered with the Commission in any capacity.

C. The Relief Defendants

21. International Bullion Services (Bahamas), Inc. ("IBS-Bahamas") is a Bahamian corporation that receives correspondence at P.O. Box N-1836, East Bay Shopping Centre, Nassau, Bahamas. IBS-Bahamas is a custodian of funds and/or assets of the IMC Common Enterprise and/or its customers and holds customer funds in constructive trust for the benefit of customers.

22. Kimberlynn Creek Ranch, Inc. ("Kimberlynn Creek Ranch") is a California corporation with its principal place of business located at 8109 South Kelso Valley Road, Weldon, California, 92253, and receives correspondence at P.O. Box 809, Weldon, California, 93283. Kimberlynn Creek Ranch has received funds that can be traced directly to the IMC Common Enterprise's fraudulent activity and holds customer funds in constructive trust for the benefit of customers.

23. Kingsfield Racing, Inc. ("Kingsfield Racing") is a Nevada corporation that receives correspondence at 2600 W. Sahara Avenue, Suite 116-295, Las Vegas, Nevada, 89102. Kingsfield Racing has received funds that can be traced directly to the IMC Common Enterprise's fraudulent activity and holds customer funds in constructive trust for the benefit of customers.

24. FX & B, L.L.C. ("FX&B") is a Nevada corporation that receives correspondence at 5300 W. Sahara, Suite 101, Las Vegas, Nevada, 89102. FX&B has received funds that can be traced directly to the IMC Common Enterprise's fraudulent activity and holds customer funds in constructive trust for the benefit of customers.

25. AJS Enterprises, Inc. ("AJS Enterprises") is a Nevada corporation that receives correspondence at 4001 South Decatur Blvd., Suite 177, Las Vegas, Nevada, 85103. AJS Enterprises has received funds that can be traced directly to the IMC Common Enterprise's fraudulent activity and holds customer funds in constructive trust for the benefit of customers.

26. Samuel Kingsfield is an individual who has received funds that can be traced directly to the IMC Common Enterprise's fraudulent activity and holds customer funds in constructive trust for the benefit of customers.

27. Pamela Kingsfield is an individual who has received funds that can be traced directly to the IMC Common Enterprise's fraudulent activity and holds customer funds in constructive trust for the benefit of customers.

28. None of the corporate relief defendants has ever been designated by the Commission as a contract market for the trading of precious metals or any other commodities. Nor has any relief defendant ever been registered with the Commission in any capacity.

IV. FACTUAL BACKGROUND

A. The Defendants Misrepresent the Profitability Associated with Their Futures Contracts and Fail to Disclose the Risk of Near-Certain Losses

29. Since at least 1992, the IMC Common Enterprise has solicited members of the public to purchase futures contracts for precious metals and other commodities. Irrespective of actual market conditions or the month or year of the solicitations, IMC Common Enterprise telemarketers, relying on scripted sales pitches, convince customers to invest by claiming that the customer would have achieved huge profits by investing at an earlier time when defendants allegedly first contacted the customers and that prevailing market conditions make it highly likely that customers will make extraordinary profits in a short period of time.

30. For instance, scripted sales pitches that the IMC Common Enterprise filed with the State of Nevada in 1995, 1996, 1997 and 1998, claim that:

31. According to the IMC Common Enterprise telemarketers, a customer's initial investment represents a 20 percent down payment on the purchase of a commodity contract with the balance of the purchase price financed by third-party, most recently IBS-Bahamas. IBS-Bahamas purportedly takes the 20 percent down payment and the 80 percent "financed" amount and purchases physical commodities on behalf of customers. IBS-Bahamas also purportedly holds the physical commodities as collateral for the customers' loans, and issues equity calls when decreases in the price of a commodity or accumulating credit and storage fees cause customers' equity to drop below contractually permissible levels.

32. After customers send funds to the IMC Common Enterprise, they are subjected to repeated telephone calls in which the defendants' telemarketers attempt to extract even more money from them. Sometimes, the telemarketers urge the new customers to purchase more of the same commodity, claiming the price is poised to skyrocket. In other instances, the telemarketers urge customers to "diversify" their commodity portfolios by purchasing contracts for other commodities which are also poised to generate extraordinary profits. If the price of a commodity moves upward temporarily, telemarketers sometimes urge use of that excess equity to purchase additional commodities -- generating additional commissions, storage costs, and interest fees and increasing the likelihood of equity calls that would compel the customer to send in even more funds.

33. Customers learn that they are losing money when they begin receiving telephone calls from IMC Common Enterprise telemarketers who claim that their equity in the commodity contracts has fallen below permissible levels and that they must restore their equity by meeting "equity calls." The telemarketers threaten that customers who do not satisfy the equity calls will have their contracts liquidated at a loss.

34. The IMC Common Enterprise uses these "equity calls" as an additional pretext for convincing customers to purchase commodity contracts, claiming that the decrease in the commodity's price has created an opportunity to purchase additional commodities at a low price, and assuring customers that prices will skyrocket within two to three months.

35. In some instances, IBS-Bahamas has liquidated customers' contracts without notice because of a purported decrease in equity. Subsequently, the IMC Common Enterprise offers these customers the opportunity to purchase the commodity contracts again.

36. For most customers, it is only after they send money to the telemarketers that they receive account opening documentation consisting of a Customer Account Agreement, a form entitled "Appointment of Independent Broker Dealer/Legal Representative," and a Risk Disclosure Statement. Through these account opening documents, customers first learn of the commissions, interest, fees and other costs associated with the investment.

37. The IMC Common Enterprise's claims of extraordinary profits are false. All or virtually all of IMC Common Enterprise customers lose money on their investments. The defendants charge commissions and fees of roughly 40 percent of their initial payments, thereby causing customers to suffer the equivalent of a 40 percent loss on the day they purchase defendants' futures contracts. Due to the accruing credit fees and other fees that are deducted from the customers' accounts, customers are subjected to ever-increasing losses and are virtually assured of receiving equity calls and of losing the bulk of the funds they invested.

38. Reading from their scripted sales pitches, telemarketers fail to disclose the risk of near-certain loss associated with the purchase of defendants' highly-leveraged precious metals contracts.

39. The defendants make these claims of high profits and fail to disclose risks associated with their futures contracts with knowledge of their falsity or with reckless disregard for their truth or falsity.

B. The Defendants Telemarket Illegal Futures Contracts

40. The commodity contracts that the IMC Common Enterprise telemarkets concern the purchase or sale of commodities for future delivery at prices or using pricing formulas that are established at the time the contracts are initiated, and may be fulfilled through offset, cancellation, cash settlement or other means to avoid delivery.

41. The defendants market these contracts to the general public. The customers who purchase these futures contracts have no commercial need for the commodities. Instead, customers enter into these transactions to speculate and profit from anticipated price fluctuations in the markets for these commodities.

42. Customers do not anticipate taking -- and do not take -- delivery of the commodities they purchase. Once the market moves in a favorable direction, a customer expects to liquidate his or her investment by authorizing the sale of the contract and taking the profits.

43. Customers do not negotiate individual purchase agreements with the IMC Common Enterprise. The terms of delivery, rules for margin calls, and other terms and conditions of the IMC Common Enterprise's investment scheme are standardized and contained in form contracts typically provided by IBS-Bahamas.

44. When there is a drop in the price of the commodity or accumulating credit and storage fees decrease a customer's equity below pre-agreed levels, IBS-Bahamas issues an equity call. An IMC Common Enterprise telemarketer then informs the customer that additional funds must be sent to the telemarketer in order to restore the customer's equity to the pre-agreed level. If the customer does not satisfy the equity call, IBS-Bahamas purportedly sells the commodity.

45. The IMC Common Enterprise offers investments in standardized lot sizes, such as 10,000 gallons of heating oil and 10 ounces of silver.

46. Customers do not obtain any right or interest in a particular lot or other commodity unit. In fact, customers never receive warehouse receipts, certificates of ownership or other documents evidencing ownership of particular units of the commodities they purportedly purchased.

47. The IBS-Bahamas customer agreement, provided to IMC Common Enterprise customers, states that IBS-Bahamas is not contractually obligated to purchase any commodities. Instead, it is obligated only to maintain the ability to deliver commodities to customers who pay their loans in full. Thus, IBS-Bahamas is bound to deliver commodities to the customer in the future. In fact, telemarketers for the IMC Common Enterprise strongly discourage customers from obtaining delivery of commodities, telling customers that "no one obtains delivery."

48. The defendants' commodity contracts are futures contracts which are not made on or subject to the rules of a board of trade, exchange, or market located outside the United States, its territories or possessions.

49. The defendants' commodity contracts are not sold on a contract market designated by the Commission.

C. The Corporate Defendants Constitute a Common Enterprise

50. Defendants have conducted their activities through interrelated companies consisting of IBS-NC, Pinpoint, IMC-NC, IMC-AZ, IMC-NV and IMC-CA. The corporate defendants have shared officers, customers and telemarketers, commingled funds, are commonly controlled, and have engaged in a common scheme.

51. Currently, the defendants operate through IBS-NC and Pinpoint, but have told prospective and current customers that they are operating as IBS-Bahamas. In a letter dated December 16, 1998, Stein notified customers that IBS-Bahamas had purchased IMC Trading. According to Stein, IBS-Bahamas would not only continue to finance transactions and store the commodities as collateral for the loans, but it would also monitor the market and instruct customers when to purchase additional commodities or sell at a profit. Thus, as of December 16, 1998, the sales arm and the financing arm of the scheme were allegedly consolidated into one operation under the name of IBS-Bahamas. The letter stated that all customer account numbers would remain the same and that customers with questions should call IBS at a Bahamas telephone number.

52. Since December 1998, IMC Common Enterprise telemarketers, including Finateri and Temple, have continued to solicit additional purchases from customers of the IMC Common Enterprise, claiming that they are calling from IBS in the Bahamas. Telemarketers also instruct customers who purchase commodities or receive equity calls to send funds to a Bahamian address. When customers try to reach a telemarketer by calling the Bahamas telephone number, an answering service routinely advises that the telemarketer is unavailable and takes a message, which the telemarketer returns at a later time. Customers receive all correspondence from the Bahamas, including confirmation statements for individual transactions and monthly statements.

53. In reality, the alleged move of the sales operation to the Bahamas is a ruse. The only presence in the Bahamas by the IMC Common Enterprise is a private maildrop and answering service. Instead of operating from the Bahamas, as they claim, the defendants solicit customers from Charlotte, North Carolina. In addition, some money orders or cashier checks that customers send to the IBS address in the Bahamas are diverted to North Carolina and, within a few days, deposited into a Charlotte account.

D. Stein, Finateri and Temple Have Played Significant Roles in the IMC Common Enterprise's Scheme

54. Stein is a controlling person of the IMC Common Enterprise. Stein is president of IBS-NC, president of Pinpoint, controller of IMC-NV, and director of IMC-AZ. He has signed checks for IMC-AZ, IMC-NV, Pinpoint, and IBS-NC, authorized wire transfers to IBS-Bahamas, and established the phone lines in North Carolina for telemarketing.

55. Finateri is one of the principal telemarketers for the IMC Common Enterprise. Finateri convinces customers to purchase illegal futures contracts by misrepresenting the profitability associated with these contracts and by failing to disclose the risks of near-certain losses. In addition, Finateri is a controlling person of the IMC Common Enterprise. Finateri is president, secretary, treasurer, director and manager of IMC-NV; director of IMC-AZ; and chief executive officer, secretary, and chief financial officer of IMC-CA; and an authorized signer of the IBS-NC bank account. Each year from 1995 through 1998, he filed with Nevada Consumer Affairs Division the IMC Common Enterprise's applications to obtain a telemarketing license in Nevada, identifying himself as the president of IMC-NV. In addition, Finateri has convinced customers to purchase off-exchange futures contracts by misrepresenting the likelihood of profit and downplaying the risk.

56. Temple is one of the principal telemarketers for the IMC Common Enterprise. Temple convinces customers to purchase illegal futures contracts by misrepresenting the profitability associated with these contracts and by failing to disclose the risks of near-certain losses.

V. VIOLATIONS OF THE COMMODITY EXCHANGE ACT

Count One

VIOLATIONS OF SECTION 4b(a)(i)-(iii) OF THE ACT
7 U.S.C. 6b(a)(i)-(iii) (1994)
Fraud in Connection with Commodity Futures Contracts

57. Paragraphs 1 through 56 of this Complaint are realleged and incorporated herein by reference.

58. Beginning in 1992, or earlier, and continuing to the present, the IMC Common Enterprise, Finateri, and Temple, in or in connection with orders to make, or the making of, contracts of purchase or sale of commodities for future delivery, made, or to be made, for or on behalf of any other persons, where such contracts for future delivery were or could be used for the purposes set forth in Section 4b(a)(2) of the Act, 7 U.S.C. 6b(a)(2) (1994), have:

(i) cheated or defrauded or attempted to cheat or defraud other persons;

(ii) willfully made or caused to be made to other persons false reports or statements thereof, or willfully entered or caused to be entered for other persons false records thereof; or

(iii) willfully deceived or attempted to deceive other persons, all in violation of Sections 4b(a)(i)-(iii) of the Act. 7 U.S.C. 6b(a)(i)-(iii) (1994).

59. Specifically, the IMC Common Enterprise, Finateri, and Temple have engaged in a wide range of misrepresentations and omissions concerning facts that are material to the investment decisions of customers and potential customers in violation of Section 4b of the Act, 7 U.S.C. 6b, including, but not limited to:

(a) false representations that if the customers had invested with the IMC Common Enterprise when the telemarketer previously called in the first half of 1994 or the first half of 1995, the customer would have made a short term profit, which at times the telemarketer claimed would be 40% and at other times, 75%.

(b) false representations that, irrespective of market conditions and of the month or year of the solicitation, market conditions are such that prices of the commodities are about to increase significantly and that customers of the IMC Common Enterprise will reap substantial profits in a short period of time; and

(c) failure to disclose the substantial risk of loss associated with purchasing defendants' contracts.

60. From 1992, or earlier, and continuing to the present, defendants Stein and Finateri, as principals and officers of the IMC Common Enterprise, directly or indirectly controlled the IMC Common Enterprise; and they did not act in good faith, or knowingly induced, directly or indirectly, the acts constituting the violations described in this Count One. Pursuant to Section 13(b) of the Act, 7 U.S.C. 13c(b) (1994), therefore, Stein and Finateri are liable for the violations of Section 4b(a)(i)-(iii) of the Act, 7 U.S.C. 6b(a)(i)-(iii) (1994), as described in this Count One to the same extent as the IMC Common Enterprise.

Count Two

VIOLATIONS OF SECTION 4(a) OF THE ACT
U.S.C. 6(a) (1994)
Offer and Sale of Illegal Commodity Futures Contracts

61. Paragraphs 1 through 60 of this Complaint are realleged and reincorporated herein by reference.

62. The commodity contracts offered and sold by the IMC Common Enterprise, Finateri, and Temple are contracts for the purchase and sale of commodities for future delivery, commonly known as futures contracts.

63. The commodities which are the subjects of the futures contracts offered by the IMC Common Enterprise, Finateri, and Temple are commodities as defined by Section 1a(3) of the Act, 7 U.S.C. 1a(3) (1994).

64. Since at least 1992, or earlier, and continuing to the present, the IMC Common Enterprise, Finateri, and Temple have offered to enter into, entered into, executed, confirmed the execution of, and conducted an office or business in the United States for the purpose of soliciting or accepting orders for, or otherwise dealing in, transactions in, or in connection with, contracts for the purchase or sale of a commodity for future delivery (other than contracts made on or subject to the rules of a board of trade, exchange, or market located outside the United States, its territories, or possessions) when:

(a) such transactions have not been conducted on or subject to the rules of a board of trade which has been designated by the Commission as a "contract market" for such commodity; and

(b) such contracts have not been executed or consummated by or through a member of such contract market in violation of Section 4(a) of the Act. 7 U.S.C. 6(a) (1994).

65. Since at least 1992, or earlier, and continuing to the present, defendants Stein and Finateri, as principals and officers of the IMC Common Enterprise, directly or indirectly controlled the IMC Common Enterprise; and they did not act in good faith, or knowingly induced, directly or indirectly, the acts constituting the violations described in this Count Two. Pursuant to Section 13(b) of the Act, 7 U.S.C. 13c(b) (1994), therefore, Stein and Finateri are liable for the violations of Section 4(a) of the Act, 7 U.S.C. 6(a) (1994), as described in this Count Two, to the same extent as the IMC Common Enterprise.

Count Three

DISGORGEMENT OF THE ASSETS OF THE RELIEF DEFENDANTS

66. Paragraphs 1 through 65 of this Complaint are realleged and reincorporated herein by reference.

67. The IMC Common Enterprise has committed a fraud upon its customers in connection with the purchase and sale of commodity futures contracts as alleged herein.

68. The relief defendants have received funds or otherwise benefited from funds which are directly traceable to the funds obtained from the IMC Common Enterprise customers through fraud.

69. The relief defendants are not bona fide purchasers with legal and equitable title to the customers' funds or assets, and the relief defendants will be unjustly enriched if they are not required to disgorge the funds or the value of the benefit they received as a result of the IMC Common Enterprise's fraud.

70. The relief defendants should be required to disgorge the funds and assets, or the value of the benefit they received from those funds and assets, which are traceable to the IMC Common Enterprise's fraud.

71. By reason of the foregoing, the relief defendants hold funds and assets in constructive trust for the benefit of the IMC Common Enterprise customers.

VI. RELIEF

Wherefore, the Commission respectfully requests that this Court, as authorized by Section 6c of the Act, 7 U.S.C. 13a-1 (1994), and pursuant to its own equitable powers, enter:

a. a permanent injunction prohibiting the defendants and any other person or entity associated with them from engaging in conduct violative of the provisions of the Act they are alleged to have violated, and from engaging in any commodity- related activity, including soliciting new customers or customer funds;

b. an order directing the defendants and relief defendants and any successors thereof, to disgorge pursuant to such procedure as the Court may order, all benefits received from the acts or practices which constituted violations of the Act, as described herein, and interest thereon from the date of such violations;

c. an order directing the defendants to make full restitution to every customer whose funds were received by them as a result of acts and practices which constituted violations of the Act, as described herein, and interest thereon from the date of such violations;

d. an order requiring the defendants to pay civil penalties in amounts not to exceed the higher of $110,000 (or $100,000 for violations occurring before November 28, 1996) or triple the monetary gain to them for each violation of the Act, as described herein;

e. such other further remedial ancillary relief as the Court may deem appropriate.

Respectfully submitted by,
Dated: March 13, 2000
Lawrence H. Norton
Associate Director (202)-418-5354
Jodi Siff, Senior Trial Attorney
Daniel R. Salsburg, Senior Trial Attorney
Joseph Konizeski, Trial Attorney
Commodity Futures Trading Commission
Three Lafayette Center
1155 21st St. N.W.
Washington, D.C. 20581