CFTC News Release 4356-00 (3:99-CV592)
For Release February 1, 2000
VIRGINIA COURT ENTERS PERMANENT INJUNCTION AND RESTITUTION ORDER IN CFTC INJUNCTIVE ACTION AGAINST PETER BERZINS CHARGING COMMODITY POOL FRAUD
Court Permanently Bars Berzins From Trading, Seeking Registration Or Acting In Any Capacity Requiring Registration With The CFTC and Requires Him to Pay in Excess of $1 Million in Restitution
WASHINGTON — The Commodity Futures Trading Commission (CFTC) announced today that on January 18, 2000, the Honorable Robert E. Payne of the U.S. District Court for the Eastern District of Virginia entered a consent order of permanent injunction against Peter Berzins of Houston, Texas, in a case involving the fraudulent operation of a commodity pool.
The order arises out of an injunctive complaint filed by the CFTC on August 24, 1999 (see CFTC News Release #4308-99, August 26, 1999) alleging that, since at least 1996, Berzins has violated anti-fraud provisions of the Commodity Exchange Act (CEA) (sections 4b(a), 4c(b) and 4o(1)) and CFTC regulations by fraudulently soliciting and accepting from investors in excess of $500,000 to participate in a commodity pool to trade commodity futures contracts and options on futures contracts.
Specifically, the complaint alleges that in order to induce additional investments, Berzins misrepresented to prospective investors the performance record of the pool he had been trading and provided investors with written statements that falsely represented that investors were making significant monthly profits. The complaint also alleges that Berzins violated the CEA by acting as a commodity pool operator without being registered with the CFTC as such and violated CFTC regulation 33.10 by, among other things, commingling pool funds with his personal funds and failing to provide customers with required account statements.
Without admitting or denying the allegations in the CFTC complaint, Berzins consented to an order which, among other things:
1) orders Berzins to pay restitution, plus prejudgment interest, in the amount of $1,424,456, representing the amount received from investors as a result of the fraud alleged in the CFTC’s complaint; and permanently
2) prohibits him from applying for registration or seeking exemption from registration with the CFTC in any capacity, and engaging in any activity requiring such registration or exemption from registration, or acting as an agent or officer of any person registered, exempted from registration, or required to be registered with the CFTC;
3) prohibits him from trading any commodity futures contracts or options on commodity futures contracts on any contract market;
4) prohibits him from engaging in, controlling, or directing the trading for any commodity interest account for or on behalf of any other person or entity, whether by power of attorney or otherwise; and
5) enjoins him from further violations of the CEA and CFTC regulations, as charged.
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