UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF FLORIDA

_______________________________________________
)
Commodity Futures Trading Commission, ) Civil Action No. 99-6560

Plaintiff,

)
)
v. )
)
Europacific Equity and Capital, Management, Ltd., ) Filed Under Seal
Tortola Corporation, Company, Ltd., )
International Investment Group, Ltd., )
David Michael Loyd, and Richard Tichy, )
Defendant. )
_______________________________________________ )

COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF

AND FOR CIVIL MONETARY PENALTIES UNDER THE

COMMODITY EXCHANGE ACT, AS AMENDED, 7 U.S.C. 1 ET SEQ.

I. SUMMARY

1. Since at least November 1997, defendants EuroPacific Equity and Capital Management, Ltd., Tortola Corporation Company, Ltd., International Investment Group, Ltd., David Michael Loyd, and Richard Tichy, have engaged in a fraudulent scheme to solicit members of the public to participate in a commodity pool called either the International Investment Fund or the EuroPacific Fund ("Fund").

2. By falsely representing that the Fund had been generating significant profits, defendants have solicited at least ten individuals to invest a total of at least $833,000 in the Fund in amounts ranging from $8,500 to $345,000. Those funds were not placed in a segregated customer account in the name of the Fund; rather, they were deposited in a money market account controlled by defendants in which over one hundred deposits totaling approximately $2.3 million were made since November 1996. Only a small portion of the funds in this money market account, approximately $134,000, was used to trade futures contracts in a non-pool proprietary account and all of that money was lost in the market. Because defendants used all of the funds in this money market account for personal expenses or transferred them to firms and entities unrelated to any commodity pool, they misappropriated the money of the investors in the Fund.

3. In order to conceal their fraudulent activities, defendants sent fictitious account statements to investors falsely showing that the Fund was generating profits. In addition, defendants failed to provide investors with a Disclosure Document in the form required by the Act and the Regulations, failed to provide investors with statements of account and annual reports, and failed to file a Disclosure Document with the Commission.

4. Accordingly, pursuant to Section 6c of the Commodity Exchange Act, as amended ("Act"), 7 U.S.C. 13a-1 (1994), Plaintiff Commodity Futures Trading Commission ("Commission") brings this action to enjoin defendants' unlawful acts and practices, and to compel their compliance with the Act and the Commission's Regulations. In addition, the Commission seeks civil monetary penalties, remedial ancillary relief including, but not limited to, an accounting, restitution, disgorgement, pre-judgment and post-judgment interest, and the appointment of a temporary and permanent receiver, and such other relief as this Court may deem necessary or appropriate.

5. 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 or in similar acts and practices, as more fully described below.

II. JURISDICTION AND VENUE

6. The Court has jurisdiction over this action pursuant to Section 6c of the Act, 7 U.S.C. 13a-1, 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 an action against such person to enjoin such practice or to enforce compliance with the Act.

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

III. THE PARTIES

A. Plaintiff

8. The Commodity Futures Trading Commission ("Commission") is the independent federal regulatory agency charged with the administration and enforcement of the Act, 7 U.S.C. 1 et seq., and the Regulations promulgated thereunder, 17 C.F.R. 1.1 et seq. (1998).

B. Defendants

9. EuroPacific Equity and Capital Management, Ltd. ("EuroPacific") is a corporation registered in the British Virgin Islands. EuroPacific maintains an office located at 676 West Prospect Road, Fort Lauderdale, Florida 33309. EuroPacific has never been registered with the Commission in any capacity.

10. Tortola Corporation Company, Ltd. ("Tortola") is an international corporation registered in the British Virgin Islands. Tortola is the Director of EuroPacific. Tortola has never been registered with the Commission in any capacity.

11. International Investment Group, Ltd. ("IIG") is a company name used by David Loyd and Richard Tichy in promoting investments through EuroPacific. Its last known address is 1700 East Las Olas Boulevard, Penthouse Number 3, Fort Lauderdale, Florida. IIG has no record of incorporation or registration in the State of Florida. IIG has never been registered with the Commission in any capacity.

12. David Michael Loyd ("Loyd") resides at 11093 NW 9th Court, Plantation, Florida. Loyd is an agent and representative for EuroPacific and the managing partner of IIG. From June 18, 1997 to January 5, 1998, Loyd was registered with the Commission as an associated person of First Resource Trading & Capital Management, Inc. in Fort Lauderdale, Florida ("First Resource"). During that time period, First Resource was registered with the Commission as an introducing broker and commodity trading advisor. Since that time, Loyd has not been registered with the Commission in any capacity.

13. Richard Tichy ("Tichy") resides at 6035 NW 81st Terrace, Parkland, Florida. Tichy has been given a full power of attorney by Tortola to act on behalf of EuroPacific. Although Tichy was listed in Commission registration records as a principal of First Resource from September 12, 1997 to March 26, 1998, he has never been registered with the Commission in any capacity.

IV. FACTS

A. Operation of the Fund as a Commodity Pool

14. In the fall of 1997, Loyd and Tichy began soliciting individuals throughout the United States and Canada to invest in the Fund, which they described as a pool of individual investor funds which was to be used to trade commodity futures contracts and operated by EuroPacific. As part of their solicitation, they distributed promotional literature on behalf of IIG describing commodity pool investment programs offered by EuroPacific ("IIG Promotion Literature") and a contractual agreement between EuroPacific and potential investors ("Agreement").

15. The Agreement states that the business and purpose of EuroPacific is to "trade, buy, sell or otherwise acquire, hold or dispose of all forms of investments . . . for the purpose of purchasing and selling commodity futures contracts and options on commodity futures contracts, and related commodity trading business" and that clients will purchase "an interest in the trading account" operated by EuroPacific. To accomplish this business and purpose, the Agreement states that "EuroPacific offers units in a corporation allowing individual investors with limited capital to share in the profits (if any) earned by EuroPacific through its trading activities."

16. The IIG Promotional Literature touts the purported investment expertise of IIG and EuroPacific and describes various commodity pool trading programs that supposedly utilize computer-modeled trading systems. The IIG Promotional Literature states that "[t]he strategies envisioned for the fund are working as expected" and that "triple digit returns are the main goal." Based on those strategies, the IIG Promotional Literature claims that the "minimum statistically projected return for 1998" is 134.21%.

17. The IIG Promotional Literature represents that EuroPacific offers three asset allocation programs, the EURO-01 Program, the EURO-02 Program, and the EURO-03 Program, and that these programs are experiencing substantial growth.

18. The EURO-01 Program requires a minimum investment of $8,500 and is touted to generate "expected triple digit returns." The EURO-01 Program is described as the "main investment vehicle" that utilizes "a very sophisticated and complex program composed of ten non-correlated S&P 500 index trading computer models."

19. The IIG Promotional Literature states that the EURO-02 Program has a minimum investment of $25,000, of which EuroPacific will trade 30% of the investment and place the other 70% "under an umbrella policy strictly composed of triple A rated U.S. government bonds." The IIG Promotional Literature further represents that the EURO-02 Program ensures that the 70% government bond investment "will mature to 100% in averaged increments of two, four, and six years." The IIG Promotional Literature claims that the 30% trading portion of the EURO-02 Program is expected to generate triple digit returns.

20. The IIG Promotional Literature states that the EURO-03 Program has a minimum investment of $50,000 and is a trading plan for individuals with portfolios above $500,000. According to the IIG Promotional Literature, "50% of the capital invested goes to the EURO-01 Program and the other 50% to the EURO-02 Program."

21. On October 10, 1996, EuroPacific opened a money market account at Charles Schwab & Co., Inc. ("Schwab"), a financial institution. Included in the account opening documents for the EuroPacific account at Schwab was a full power of attorney authorizing Tichy to trade in the account and to transfer or withdraw funds from the account.

22. Pursuant to the terms of the Agreement, individuals who purchase trading units in the commodity pool trading account managed by EuroPacific are directed to wire funds to the EuroPacific money market account at Schwab.

B. The Solicitation of Individuals to Invest in the Fund

23. At various times in 1997 and 1998, Loyd and Tichy appeared at investment seminars in Mexico and Aruba and solicited individuals to participate in the Fund.

24. At the seminars, Loyd claimed that he was offering investors an opportunity to participate in a commodity futures trading pool that he and Tichy had established. Loyd stated that Tichy had designed a new computer software program to trade futures contracts on the Standard and Poor's 500 Stock Index. Loyd said that he expected returns of 100% for investors and claimed that Tichy was a highly successful trader. He also claimed that he and Tichy had tested the computer trading program using their own money and had achieved returns of 754% in a three-year period. At some of the seminars, Loyd provided attendees with brochures claiming that the EuroPacific Fund had returned 16.72% in profits during the first two months of 1998 and that the minimum projected return for 1998 was 134.21%.

25. After the seminars, Loyd and Tichy invited prospective investors to meet with them in private sessions. At these sessions, Loyd again claimed that Tichy had designed a computerized trading program that had yielded very profitable trading results in excess of 100%. Loyd also distributed business cards, literature regarding his company, and account opening agreements for the Fund. These documents listed telephone and facsimile numbers for IIG at an office in Fort Lauderdale, Florida.

26. Individuals who attended the seminars subsequently telephoned Loyd at the IIG office in Florida to make arrangements to invest in the Fund. Pursuant to Loyd's instructions, individuals filled out the account opening agreements for the Fund and sent them to Loyd at the IIG office in Florida.

27. Pursuant to the instructions contained in the account opening documents, individuals wired funds in amounts ranging between $8,500 and $345,000 to an account in the name of EuroPacific at Schwab in San Francisco to participate in a the Fund operated by EuroPacific.

28. As the result of the defendants' fraudulent solicitations, at least ten individuals have invested a total of at least $833,000 in the Fund in amounts ranging from $8,500 to $345,000. Those funds were deposited in the EuroPacific Schwab account in which over one hundred deposits totaling approximately $2.3 million were made since November 1996.

C. Misappropriation of Investor Funds

29. Documents for the Schwab account, which is controlled by Tichy, show that the majority of the $2.3 million in deposits was transferred to non-pool related entities and individuals. Those documents show that funds in the Schwab account were used to pay the expenses of Tichy and Loyd in connection with purchases at restaurants, automobile rentals, vacations, and the purchase of various personal goods and services. During this time, approximately $150,000 was transferred to two non-pool proprietary commodity futures accounts in the name of EuroPacific at Linnco Futures Group, LLC ("LFG"), a futures commission merchant located in Chicago, Illinois. Tichy was listed as the authorized trader for the two LFG accounts, which were closed in December 1998 after sustaining virtually total losses.

30. Defendants sent false statements and reports to the investors showing profitable pool performance, although only approximately 5% of funds in the EuroPacific Schwab account were used for trading commodity futures contracts and virtually all of those funds were lost. These monthly statements and reports included cover letters that summarized fictitious trading activity in the purported commodity pool, falsely represented an increasing net asset value, and misrepresented the investors' share of profits in the pool. For example, investors received letters in May 1998 stating that 50% of the pool funds had been invested in the market and that a 24.31% profit had been realized. Investors also received letters in June 1998 stating that 75% of the pool funds had been placed in the market and that a 31.73% profit had been realized. In August 1998, investors received letters stating that the return on their investments in the Fund had surpassed 50% for 1998 and that they were on track to receive a 60% to 70% return on their investments by the end of 1998. Actually, whatever trading occurred during these periods resulted in losses.

31. Beginning in October 1998 and continuing through the present, investors in the Fund have made numerous attempts to contact Loyd and Tichy to request the return of their investments. Investors have been, and continue to be, unable to contact Loyd or Tichy or to obtain the return of their funds.

V. VIOLATIONS OF THE COMMODITY EXCHANGE ACT

COUNT I

VIOLATIONS OF SECTION 4b(a)(i) AND (ii) OF THE ACT, 7 U.S.C. 6b(a)(i)

AND (ii), AND SECTION 4.20(c) OF THE REGULATIONS, 17 C.F.R. 4.20(c) :

FRAUDULENT STATEMENTS IN CONNECTION WITH

COMMODITY FUTURES CONTRACTS,

MISAPPROPRIATION OF CUSTOMER FUNDS, AND

COMMINGLING OF COMMODITY POOL FUNDS

32. Paragraphs 1 through 31 are realleged and incorporated herein by reference.

33. From at least November 1997 to the present, EuroPacific, IIG, Loyd, and Tichy violated Section 4b(a)(i) and (ii) of the Act, 7 U.S.C. 6b(a)(i) and (ii), in that they cheated or defrauded or attempted to cheat or defraud other persons by, among other things: (a) misrepresenting the trading performance of the Fund; (b) omitting to inform investors that their funds would be placed in non-Fund controlled accounts; (c) disseminating false letters and reports regarding the trading performance of the Fund; and (d) misappropriating investor funds by depositing them into non-Fund controlled accounts.

34. From at least November 1997 to the present, EuroPacific violated Section 4.20(c) of the Regulations, 17 C.F.R. 4.20(c), in that it acted as a commodity pool operator and commingled the property of a commodity pool that it operated or intended to operate with the property of another person.

35. The acts and omissions alleged in this Count were made in or in connection with orders to make, or the making of contracts for future delivery, made, or to be made for or on behalf of other persons where such contracts for future delivery were or may have been used for (a) hedging any transaction in interstate commerce in such commodity, or the products or byproducts thereof, or (b) determining the price basis of any transaction in interstate commerce in such commodity, or (c) delivering any such commodity sold, shipped, or received in interstate commerce for the fulfillment thereof.

36. Defendants IIG, Loyd, and Tichy engaged in the conduct alleged in this Count within the scope of their offices or employment as agents of defendant EuroPacific. Therefore, defendant EuroPacific is liable as a principal for the violations of its agents. See Section 2(a)(1)(A)(iii) of the Act, 7 U.S.C. 4.

37. Defendants Loyd and Tichy engaged in the conduct alleged in this Count within the scope of their offices or employment as agents of defendant IIG. Therefore, defendant IIG is liable as a principal for the violations of its agents. See Section 2(a)(1)(A)(iii) of the Act, 7 U.S.C. 4.

38. Defendant Tichy engaged in the conduct alleged in this Count within the scope of his office or employment as an agent of defendant Tortola. Therefore, defendant Tortola is liable as a principal for the violations of its agent. See Section 2(a)(1)(A)(iii) of the Act, 7 U.S.C. 4.

39. Defendants Loyd and Tichy willfully aided, abetted, counseled, commanded, induced, or procured the commission of violations of the Act, or acted in combination or in concert with defendant EuroPacific or willfully caused acts to be done or omitted which when directly performed or omitted constituted defendant EuroPacific's violations described in this Count. Pursuant to Section 13(a) of the Act, 7 U.S.C. 13c(a), defendants Loyd and Tichy therefore violated Section 4b(a)(i) and (ii) of the Act, 7 U.S.C. 6b(a)(i) and (ii), and Section 4.20(c) of the Regulations, 17 C.F.R. 4.20(c), as described in this Count.

40. Defendants Loyd and Tichy willfully aided, abetted, counseled, commanded, induced, or procured the commission of violations of the Act, or acted in combination or in concert with defendant IIG or willfully caused acts to be done or omitted which when directly performed or omitted constituted defendant IIG's violations described in this count. Pursuant to Section 13(a) of the Act, 7 U.S.C. 13c(a), defendants Loyd and Tichy therefore violated Section 4b(a)(i) and (ii) of the Act, 7 U.S.C. 6b(a)(i) and (ii), as described in this Count.

41. Defendant Loyd controls defendant IIG, directly or indirectly, and did not act in good faith or knowingly induced, directly or indirectly, defendant IIG's conduct alleged in this Count. Pursuant to Section 13(b) of the Act, 7 U.S.C. 13c(b), defendant Loyd is liable for defendant IIG's violations of Section 4b(a)(i) and (ii) of the Act, 7 U.S.C. 6b(a)(i) and (ii), as described in this Count.

42. Defendants Tichy and Tortola control defendant EuroPacific, directly or indirectly, and did not act in good faith or knowingly induced, directly or indirectly, defendant EuroPacific's conduct alleged in this Count. Pursuant to Section 13(b) of the Act, 7 U.S.C. 13c(b), defendants Tichy and Tortola are liable for defendant EuroPacific's violations of Section 4b(a)(i) and (ii) of the Act, 7 U.S.C. 6b(a)(i) and (ii), and Section 4.20(c) of the Regulations, 17 C.F.R. 4.20(c), as described in this Count.

COUNT II

VIOLATIONS OF SECTION 4o(1)(A) and (B) OF THE ACT,

7 U.S.C. 6o(1)(A) and (B): FRAUD BY COMMODITY POOL OPERATORS

43. Paragraphs 1 through 42 are realleged and incorporated herein by reference. .

44. From at least November 1997 to the present, EuroPacific, IIG, Loyd, and Tichy, while acting as CPOs and associated persons of a CPO, violated Section 4o(1) of the Act, 7 U.S.C. 6o(1), in that, directly and indirectly, they have been or are employing a device, scheme, or artifice to defraud pool participants or prospective pool participants, or have engaged or are engaging in transactions, practices or courses of business which have operated or are operating as a fraud or deceit upon pool participants or prospective pool participants. These fraudulent transactions, practices, or courses of business include, among other things: (a) misrepresenting the trading performance of the Fund; (b) omitting to inform investors that their funds would be placed in non-Fund controlled accounts; (c) disseminating false letters and reports regarding the trading performance of the Fund; and (d) misappropriating investor funds by depositing them into non-Fund controlled accounts.

45. Defendants IIG, Loyd and Tichy engaged in the conduct alleged in this Count within the scope of their offices or employment as agents of defendant EuroPacific. Therefore, defendant EuroPacific is liable as a principal for the violations of its agents. See Section 2(a)(1)(A)(iii) of the Act, 7 U.S.C. 4.

46. Defendants Loyd and Tichy engaged in the conduct alleged in this Count within the scope of their offices or employment as agents of defendant IIG. Therefore, defendant IIG is liable as a principal for the violations of its agents. See Section 2(a)(1)(A)(iii) of the Act, 7 U.S.C. 4.

47. Defendant Tichy engaged in the conduct alleged in this Count within the scope of his office or employment as an agent of defendant Tortola. Therefore, defendant Tortola is liable as a principal for the violations of its agent. See Section 2(a)(1)(A)(iii) of the Act, 7 U.S.C. 4.

48. Defendants Loyd and Tichy willfully aided, abetted, counseled, commanded, induced, or procured the commission of violations of the Act, or acted in combination or in concert with defendant EuroPacific or willfully caused acts to be done or omitted which when directly performed or omitted constituted defendant EuroPacific's violations described in this Count. Pursuant to Section 13(a) of the Act, 7 U.S.C. 13c(a), defendants Loyd and Tichy therefore violated Section 4o of the Act, 7 U.S.C. 6o, as described in this Count.

49. Defendants Loyd and Tichy willfully aided, abetted, counseled, commanded, induced, or procured the commission of violations of the Act, or acted in combination or in concert with defendant IIG or willfully caused acts to be done or omitted which when directly performed or omitted constituted defendant IIG's violations described in this count. Pursuant to Section 13(a) of the Act, 7 U.S.C. 13c(a), defendants Loyd and Tichy therefore violated Section 4o of the Act, 7 U.S.C. 6o, as described in this Count.

50. Defendants Tichy and Tortola control defendant EuroPacific, directly or indirectly, and did not act in good faith or knowingly induced, directly or indirectly, defendant EuroPacific's conduct alleged in this Count. Pursuant to Section 13(b) of the Act, 7 U.S.C. 13c(b), defendants Tichy and Tortola are liable for defendant EuroPacific's violations of Section 4o of the Act, 7 U.S.C. 6o, as described in this Count.

51. Defendant Loyd controls defendant IIG, directly or indirectly, and did not act in good faith or knowingly induced, directly or indirectly, defendant IIG's conduct alleged in this Count. Pursuant to Section 13(b) of the Act, 7 U.S.C. 13c(b), Loyd is liable for IIG's violations of Section 4o of the Act, 7 U.S.C. 6o, as described in this Count.

COUNT III

VIOLATION OF SECTION 4m(1) OF THE ACT, 7 U.S.C. 4m(1):

ACTING AS AN UNREGISTERED COMMODITY POOL OPERATOR

52. Paragraphs 1 through 51 are realleged and incorporated herein by reference.

53. A "commodity pool" is any investment trust, syndicate or similar form of enterprise operated for the purpose of trading commodity interests. 17 C.F.R. 4.10(d).

54. A "commodity pool operator" ("CPO") is any firm or individual engaged in a business which is in the nature of an investment trust, syndicate, or similar form of enterprise, and that, in connection therewith, solicits, accepts, or receives from others funds, securities, or property, either directly through capital contributions, the sale of stock or other forms of securities, or otherwise, for the purpose of trading in any commodity for future delivery on or subject to the rules of any contract market. Section 1a(4) of the Act, 7 U.S.C. 1a(4). With certain specified exceptions and exemptions not applicable here, CPOs are required to be registered with the Commission pursuant to Section 4m(1) of the Act, 7 U.S.C. 6m(1).

55. The Fund is a commodity pool.

56. EuroPacific is a CPO and acted as such in operating the Fund.

57. From at least November 1997 to the present, EuroPacific violated Section 4m(1) of the Act, 7 U.S.C. 6m(1), in that it solicited, accepted and received funds from the public for the purpose of trading in commodity interests without being registered, as required, with the Commission as a CPO and made use of the mails or other means or instrumentalities of interstate commerce in connection with its business as a CPO.

58. Defendants IIG, Tortola, Loyd, and Tichy willfully aided, abetted, counseled, commanded, induced, or procured the commission of violations of the Act, or acted in combination or in concert with defendant EuroPacific or willfully caused acts to be done or omitted which when directly performed or omitted constituted defendant EuroPacific's violations described in this Count. Pursuant to Section 13(a) of the Act, 7 U.S.C. 13c(a), IIG, Tortola, Loyd, and Tichy therefore violated Section 4m(1) of the Act, 7 U.S.C. 6m(1), as described in this Count.

59. Defendants Tichy and Tortola control defendant EuroPacific, directly or indirectly, and did not act in good faith or knowingly induced, directly or indirectly, defendant EuroPacific's conduct alleged in this Count. Pursuant to Section 13(b) of the Act, 7 U.S.C. 13c(b), Tichy and Tortola are each liable for EuroPacific's violations of Section 4m(1) of the Act, 7 U.S.C. 6m(1), as described in this Count.

COUNT IV

VIOLATIONS OF SECTION 4k(2) OF THE ACT,

7 U.S.C. 6k(2), AND SECTION 3.12(a) OF THE

REGULATIONS, 17 C.F.R. 3.21(a): ACTING AS UNREGISTERED

ASSOCIATED PERSONS OF A COMMODITY POOL OPERATOR

AND PERMITTING UNREGISTERED ASSOCIATED PERSONS

TO BE ASSOCIATED WITH A COMMODITY POOL OPERATOR

60. Paragraphs 1 through 59 are realleged and incorporated herein by reference.

61. It is unlawful for any person to be associated with a CPO as a partner, officer, employee, consultant or agent (or any person occupying a similar status or performing similar functions) in any capacity that involves the solicitation of funds, securities or property for participation in a commodity pool unless that person is registered as an associated person ("AP") of a CPO. Section 4k(2) of the Act, 7 U.S.C. 6k(2), and Section 3.12 of the Regulations, 17 C.F.R. 3.12. Further, it is unlawful for a CPO to permit such an unregistered AP to become or remain associated with the CPO in any such capacity. Section 4k(2) of the Act, 7 U.S.C. 6k(2).

62. From at least November 1997 to the present, defendants Loyd and Tichy violated Section 4k(2) of the Act, 7 U.S.C. 6k(2), and Section 3.12(a) of the Commission's Regulations, 17 C.F.R. 3.12(a), in that they solicited funds for participation in the Fund or supervised persons so engaged without being registered, as required, with the Commission as associated persons of a CPO.

63. Defendants Loyd and Tichy engaged in the conduct alleged in this Count within the scope of their offices or employment as agents of defendant EuroPacific. Therefore, defendant EuroPacific is liable as a principal for the violations of its agents. See Section 2(a)(1)(A)(iii) of the Act, 7 U.S.C. 4.

64. Defendants Loyd and Tichy engaged in the conduct alleged in this Count within the scope of their offices or employment as agents of defendant IIG. Therefore, defendant IIG is liable as a principal for the violations of its agents. See Section 2(a)(1)(A)(iii) of the Act, 7 U.S.C. 4.

65. From at least November 1997 to the present, EuroPacific violated Section 4k(2) of the Act, 7 U.S.C. 6k(2), in that as a CPO it permitted Loyd and Tichy to solicit funds for participation in the Fund or to supervise persons so engaged without being registered with the Commission as associated persons of a CPO.

66. Defendants IIG, Tortola, Loyd, and Tichy willfully aided, abetted, counseled, commanded, induced, or procured the commission of violations of the Act, or acted in combination or in concert with defendant EuroPacific or willfully caused acts to be done or omitted which when directly performed or omitted constituted EuroPacific's violations of Section 4k(2) of the Act, 7 U.S.C. 6k(2), as described in this Count. Pursuant to Section 13(a) of the Act, 7 U.S.C. 13c(a), IIG, Tortola, Loyd, and Tichy therefore violated Section 4k(2) of the Act, 7 U.S.C. 6k(2), as described in this Count.

67. Defendants Tichy and Tortola control EuroPacific, directly or indirectly, and did not act in good faith or knowingly induced, directly or indirectly, EuroPacific's conduct alleged in this Count. Pursuant to Section 13(b) of the Act, 7 U.S.C. 13c(b), Tichy and Tortola are each liable for EuroPacific's violations of Section 4k(2) of the Act, 7 U.S.C. 6k(2), as described in this Count.

COUNT V

VIOLATIONS OF SECTION 4n(4) OF THE ACT, 7 U.S.C. 6n(4),

AND SECTIONS 4.21, 4.22, 4.24, 4.25 AND 4.26 OF THE

COMMISSION'S REGULATIONS, 17 C.F.R. 4.21, 4.22, 4.24, 4.25, 4.26:

FAILURE TO COMPLY WITH REPORTING AND DISCLOSURE REQUIREMETS

68. Paragraphs 1 through 67 are realleged and incorporated herein by reference.

69. Section 4n(4) of the Act, 7 U.S.C. 6n(4), provides that every CPO shall regularly furnish statements of account to each participant in his operations in the form and manner prescribed by the Commission and shall include in such statements complete information as to the current status of all trading accounts in which a pool participant has an interest.

70. Section 4.21 of the Commission's Regulations, 17 C.F.R. 4.21, provides that no CPO registered or required to be registered under the Act may directly or indirectly, solicit, accept or receive funds, securities or other property from a prospective participant in a pool that it operates or that it intends to operate unless, on or before the date it engages in that activity, the CPO delivers or causes to be delivered to the prospective participant a Disclosure Document for the pool containing the information required by the Commission's Regulations.

71. Section 4.24 of the Commission's Regulations, 17 C.F.R. 4.24, sets forth the information that is required to be included in a pool Disclosure Document, including, but not limited to, a specified statement regarding risk, a disclosure of the investment program and the use of proceeds, a description of past and future fees and expenses, and a disclosure of the pool's past performance.

72. Section 4.25 of the Commission's Regulations, 17 C.F.R. 4.25, specifies the performance disclosures a CPO must make regarding a commodity pool.

73. Section 4.26 of the Commission's Regulations, 17 C.F.R. 4.26, requires that the pool Disclosure Document be filed with the Commission.

74. Section 4.22 of the Commission's Regulations, 17 C.F.R. 4.22, requires a CPO who is registered or required to be registered under the Act to distribute to pool participants a monthly account statement and an annual report containing specified information.

75. From at least November 1997 to the present, defendant EuroPacific violated Section 4n(4) of the Act, 7 U.S.C. 6n(4), and Commission Regulations 4.21, 4.22, 4.24, 4.25, and 4.26, 17 C.F.R. 4.21, 4.22, 4.24, 4.25, 4.26, by failing to provide a pool Disclosure Document in the form specified by the Commission's Regulations to prospective pool participants, failing to distribute to pool participants monthly account statements and an annual report, and failing to file a pool Disclosure Document with the Commission.

76. Defendants IIG, Tortola, Loyd, and Tichy willfully aided, abetted, counseled, commanded, induced, or procured the commission of violations of the Act, or acted in combination or in concert with defendant EuroPacific or willfully caused acts to be done or omitted which when directly performed or omitted constituted defendant EuroPacific's violations of Section 4n(4) of the Act, 7 U.S.C. 6n(4), and Commission Regulations 4.21, 4.22, 4.24, 4.25, and 4.26, 17 C.F.R. 4.21, 4.22, 4.24, 4.25, 4.26, as described in this Count. Pursuant to Section 13(a) of the Act, 7 U.S.C. 13c(a), defendants IIG, Tortola, Loyd, and Tichy therefore violated Section 4n(4) of the Act, 7 U.S.C. 6n(4), and Commission Regulations 4.21, 4.22, 4.24, 4.25, and 4.26, 17 C.F.R. 4.21, 4.22, 4.24, 4.25, 4.26, as described in this Count.

77. Defendants Tichy and Tortola control defendant EuroPacific, directly or indirectly, and did not act in good faith or knowingly induced, directly or indirectly, defendant EuroPacific's conduct alleged in this Count. Pursuant to Section 13(b) of the Act, 7 U.S.C. 13c(b), defendants Tichy and Tortola are each liable for defendant EuroPacific's violations of Section 4n(4) of the Act, 7 U.S.C. 6n(4), and Commission Regulations 4.21, 4.22, 4.24, 4.25, and 4.26, 17 C.F.R. 4.21, 4.22, 4.24, 4.25, 4.26.

VI. RELIEF

WHEREFORE, Plaintiff respectfully requests that this Court:

A. Enter an order of permanent injunction enjoining Defendants, all persons insofar as they are acting in the capacity of agents, servants, employees, successors, assigns, or attorneys of defendants, and all persons insofar as they are acting in active concert or participation with defendants, who receive actual notice of the order, by personal service or otherwise, from directly or indirectly:

1. Cheating or defrauding or attempting to cheat or defraud other persons and willfully making or causing to be made to other persons any false report or statement thereof, in or in connection with any order to make, or the making of, any contract of sale of any commodity for future delivery, made, or to be made, for or on behalf of any other person if such contract for future delivery is or may be used for (a) hedging any transaction in interstate commerce in such commodity or the products or byproducts thereof, or (b) determining the price basis of any transaction in interstate commerce in such commodity, or (c) delivering any such commodity sold, shipped, or received in interstate commerce for the fulfillment thereof, in violation of Section 4b(a)(i) and (ii) of the Act, 7 U.S.C. 6b(a)(i) and (ii);

2. Acting as a CPO, directly or indirectly, without being registered under the Act and using the mails or any means or instrumentality of interstate commerce in connection with its business as a CPO in violation of Section 4m(1) of the Act, 7 U.S.C. 6m(1);

3. Acting as associated persons of a CPO, directly or indirectly, without being registered under the Act or permitting persons to act as associated persons without being registered under the Act, in violation of Section 4k(2) of the Act, 7 U.S.C. 6k(2), and Section 3.12(a) of the Commission's Regulations, 17 C.F.R. 3.12(a);

4. Employing any device, scheme, or artifice to defraud any participant or prospective participant, or engaging in any transaction, practice, or course of business which operates as a fraud or deceit upon any participant or prospective participant, by use of the mails or any means or instrumentality of interstate commerce, in violation of Section 4o(1) of the Act, 7 U.S.C. 6o(1); and

5. Failing to provide a Disclosure Document in the form specified by the Commission's Regulations to prospective pool participants, failing to distribute to pool participants monthly account statements and an annual report, and failing to file a Disclosure Document with the Commission, in violation of Section 4n(4) of the Act, 7 U.S.C. 6n(4), and Commission Regulations 4.21, 4.22, 4.24, 4.25, and 4.26, 17 C.F.R. 4.21, 4.22, 4.24, 4.25, 4.26.

B. An order directing defendants to make an accounting to the Court of all their assets and liabilities, together with all funds they received from and paid to investors and other persons in connection with commodity interest transactions, and all disbursements for any purpose whatsoever of funds received from investors in the Fund and other commodity interest investors, including salaries, commissions, fees, loans and other disbursements of money and property of any kind, from January 1, 1996, to and including the date of such accounting.

C. An order prohibiting defendants, all persons insofar as they are acting in the capacity of agents, servants, employees, successors, assigns, or attorneys of defendants, and all persons insofar as they are acting in active concert or participation with defendants who receive actual notice of the Order by personal service or otherwise, from directly or indirectly: (1) soliciting or accepting any funds from any person in connection with the purchase or sale of any commodity interest contract; (2) placing orders or giving advice or price quotations, or other information in connection with the purchase or sale of commodity interest contracts for themselves and others; (3) introducing customers to any other person engaged in the business of commodity interest trading; (4) issuing statements or reports to others concerning commodity interest trading; and (5) otherwise engaging in any business activities related to commodity interest trading.

D. An order requiring defendants to disgorge to any officer appointed and directed by the Court or directly to their investors all benefits received including, but not limited to, salaries, commissions, loans, fees, revenues and trading profits derived, directly or indirectly, from acts or practices which constitute violations of the Act as described herein, including pre-judgment and post-judgment interest.

E. An order requiring defendants to make restitution for harm caused by their violations of the provisions of the Act and the Regulations as described herein, including prejudgment and post-judgment interest.

F. An order requiring defendants to pay civil penalties under Section 6c of the Act, 7 U.S.C. 9a, to be assessed by the Court separately against each of them, in amounts not more than the higher of $100,000, or $110,000 for violations committed after November 27, 1996, or triple the monetary gain to defendants for each violation of the Act.

G. Such other equitable relief, including the appointment of a temporary or permanent receiver, as the Court may deem necessary or appropriate under the circumstances.

Respectfully submitted,
---------------------------------------------------------
Richard P. Foelber, Esq.
Andrew Shipe, Esq.
Kevin Lombardi, Esq.
Attorneys for Plaintiff
United States Commodity Futures Trading Commission
Division of Enforcement
Three Lafayette Centre
1155 21st Street, N.W.
Washington, D.C. 20581
(202) 418-5320
(202) 418-5538 (fax)
Dated: May 5, 1999 --------------------------------------------------------