CFTC News Release 4453-00 (99-CV-138-EDGAR)

For Release September 27, 2000

TENNESSEE DISTRICT COURT ENTERS CONSENT ORDER OF PERMANENT INJUNCTION AGAINST EDWIN JAY SHELDON AND APPLIED CAPITAL MANAGEMENT, LLC (ACM) IN COMMODITY POOL FRAUD CASE

The Consent Order Requires Sheldon and ACM to Make Full Restitution to Investors of Up to Approximately $334,000

WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that the United States District Court for the Eastern District of Tennessee entered a consent order of permanent injunction and other equitable relief against Edwin Jay Sheldon of Little Falls, New Jersey, and Applied Capital Management, LLC, a New Jersey limited liability company, defendants in CFTC v. Edwin Jay Sheldon, et al. In its complaint, the CFTC charged the defendants with violating the anti-fraud, registration, and disclosure and reporting requirements of the Commodity Exchange Act (CEA).

The consent order, filed on September 15, 2000, arises out of the CFTC's April 28, 1999, complaint, alleging, among other things, that defendants Sheldon and Charles Edward Powell fraudulently solicited investors in or around Manchester, Tennessee, to invest in the Fair Haven Futures Fund, LLC, a commodity pool managed by ACM (see CFTC News Release 4259-99, April 29, 1999). Sheldon, on behalf of himself and ACM, agreed to the entry of the consent order without admitting or denying the findings of the order or the allegations of the complaint.

The consent order finds that Sheldon violated the anti-fraud and registration provisions of the CEA and Commission regulations by misrepresenting the profitability of the Fair Haven Futures Fund, the amount of investor funds at risk, and his past trading record. In addition, the order finds that Sheldon and ACM distributed to investors account statements that fraudulently inflated the net asset value of the Fund. According to the order, these investors lost approximately $334,000. The consent order also finds that Sheldon and ACM filed a false annual report with the Commission.

The consent order requires Sheldon and ACM jointly and severally to make full restitution to investors of up to approximately $334,000, pursuant to an income-based, five-year payment plan. The order also enjoins Sheldon and ACM from further violating the provisions of the CEA and CFTC regulations as charged and permanently bars Sheldon from trading for himself or others and registering with the CFTC or otherwise being involved in the commodity futures industry.

Separately, on February 3, 2000, the court entered a default judgment against Powell. The default judgment, among other things, enjoins Powell from further violations of the CEA and CFTC regulations and requires Powell to make full restitution to investors.

The CFTC acknowledges the valuable assistance of the New Jersey Passaic County Prosecutor's Office in this case.

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