CFTC News Release 4386-00 (97-Civ 7061)
For Release March 27, 2000
ILLINOIS FEDERAL DISTRICT COURT ENTERS CONSENT ORDER OF PERMANENT INJUNCTION AND OTHER EQUITABLE RELIEF AGAINST FTI FINANCIAL GROUP AND THREE OF ITS PARTNERS IN CFTC INJUNCTIVE ACTION CHARGING COMMODITY POOL FRAUD
Court Permanently Bars FTI And Samuel Foreman, Mark Stevens, and Carolyn Munn From Trading, Seeking Registration or Acting in Any Capacity Requiring Registration with the CFTC and Requires Them to Pay in Excess of $700,000 in Restitution
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that on March 24, 2000, the Honorable Harry D. Leinenweber of the U.S. District Court for the Northern District of Illinois entered a consent order of permanent injunction against FTI Financial Group (FTI) of Toledo, Ohio, a general partnership, and three of its partners: Samuel H. Foreman of Maumee, Ohio; Mark G. Stevens of Grand Rapids, Ohio; and Carolyn F. Munn of Swanton, Ohio in a case involving the fraudulent operation of three commodity pools.
The order arises out of an injunctive complaint filed by the CFTC on October 9, 1997 alleging that the defendants – FTI, Foreman, Stevens, and Munn – cheated and defrauded commodity pool participants, misappropriated money solicited from FTI participants, and acted as commodity pool operators (CPOs) or as associated persons of a CPO without being registered with the CFTC, in violation of sections 4b(a), 4m(1), 4k(2) and 4o(1) of the Commodity Exchange Act (CEA). (See CFTC News Release 4063-97, October 10, 1997.)
Under the consent order, the court made findings of fact that the defendants misrepresented to pool participants that their investments had minimum risk, misrepresented to participants the actual value of their investments, and issued false account statements, among other findings of fact. The court also found that the defendants received more than $1.2 million from 30 investors in the three commodity pools, lost approximately $717,000 trading commodity interests, and used over $200,000 of investors’ money to pay FTI’s business expenses and fees.
Without admitting or denying the findings of fact, the defendants consented to an order which, among other things:
1) requires the defendants to pay restitution, plus prejudgment interest, in the amount of $860,444.79, representing the remaining amount owed investors after accounting for defendants’ prior restitution payments to investors;
2) enjoins them from further violations of the CEA and CFTC regulations, as alleged;
3) permanently prohibits the defendants from seeking registration or exemption from registration with the CFTC in any capacity, and engaging in any activity requiring such registration or exemption from registration, or acting as agents or officers of any person registered, exempted from registration, or required to be registered with the CFTC; and
4) permanently prohibits the defendants from trading any commodity futures contracts or options on commodity futures contracts on any contract market and 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.
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