CFTC News Release 4364-00 (Civ 99-02412 GAF) (CFTC Docket No. SD 00-02)
For Release February 17, 2000
CALIFORNIA FEDERAL DISTRICT COURT ENTERS CONSENT ORDER OF PERMANENT INJUNCTION AND RESTITUTION AGAINST MARK E. CHULIK IN CFTC INJUNCTIVE ACTION CHARGING COMMODITY POOL FRAUD
CFTC Files And Settles Related Statutory Disqualification Proceeding and Revokes Chulik’s Registration As a Commodity Trading Advisor
WASHINGTON--The Commodity Futures Trading Commission (CFTC) announced today that on February 15, 2000, U.S. District Judge Gary A. Feess of the Central District of California entered a consent order of permanent injunction against Mark E. Chulik of Manhattan Beach, California.
The consent order arises out of a complaint filed by the CFTC against Chulik on March 9, 1999, alleging, among other things, that Chulik committed commodity pool fraud while acting as an unregistered commodity pool operator (CPO), by misappropriating pool funds and reporting fictitious profits (see CFTC News Release 4244-99, March 17, 1999).
Specifically, the consent order finds that: (1) while acting as an unregistered CPO, Chulik solicited in excess of $1.6 million from at least 14 investors and pooled those funds for the purposes of trading commodity futures contracts; (2) Chulik transferred a substantial portion of the pool’s funds to his own account, commingled those funds with his personal funds and used the commingled funds to trade futures contracts in his personal futures trading account; (3) Chulik reported fictitious profits to customers despite trading losses in excess of $500,000, and that he misappropriated other pool funds; and (4) Chulik fraudulently exaggerated the balances in at least one individual customer account, the trading of which he directed in his capacity as a registered commodity trading advisor (CTA).
Order Requires Chulik to Pay in Excess of $1 Million in Restitution
Based on those findings, the consent order concludes that Chulik violated sections 4(b), 4m, and 4o of the Commodity Exchange Act (CEA) and CFTC regulations 4.20, 4.21, and 4.22. The order permanently enjoins Chulik from violating these sections of the CEA and the regulations and from trading, seeking registration, or acting in any capacity requiring registration with the CFTC. The order also requires him to pay in excess of $1 million in restitution, pursuant to a payment plan and assets frozen by prior court order. Chulik consented to the court's order without admitting or denying the court's findings of fact and conclusions of law.
On February 17, 2000, the CFTC simultaneously filed a Notice of Intent to Suspend, Revoke, or Restrict Chulik’s registration as a CTA pursuant to section 8a(2)(C) and (E) of the CEA and issued an Opinion and Order accepting Chulik’s offer of settlement, finding him statutorily disqualified from registration and revoking his registration. The statutory disqualification action was based on the entry of the consent order finding that he violated the CEA and CFTC regulations and enjoining him from engaging in fraudulent activity in violation of the CEA and CFTC regulations and from acting as an IB or acting in any other capacity requiring registration.
# # #