CFTC News Release 4477-00 (CFTC Docket No. 01-04)
For Release November 29, 2000
CFTC FILES ADMINISTRATIVE COMPLAINT AGAINST ISAAC FLEYSHMAKHER, OF CHICAGO, ALLEGING COMMODITY POOL FRAUD
CFTC Complaint Alleges That Fleyshmakher Made Fraudulent Solicitations and Engaged in Unauthorized Trading and Misappropriation of Funds in Connection with His Operation of New Frontier and New Millennium Commodity Pools
WASHINGTON - The Commodity Futures Trading Commission (CFTC) announced today the filing of a three-count anti-fraud administrative complaint against Isaac Fleyshmakher of Chicago, Illinois, alleging that Fleyshmakher violated sections 4b and 4o of the Commodity Exchange Act (CEA) by making unauthorized commodity trades and misappropriating investor funds of the New Frontier and New Millennium commodity pools. The complaint further alleges that Fleyshmakher misrepresented the performance record of the New Millennium pool to investors and failed to register with the Commission as a commodity pool operator.
Specifically, the CFTC complaint alleges that from July 1998 through February 2000, Fleyshmakher solicited investors for and managed two separate investment pools, New Frontier and New Millennium. According to the complaint, Fleyshmakher defrauded New Frontier investors by transferring some of their funds, which had been solicited to trade securities, into a commodity trading account without their knowledge and consent. The complaint charges that by trading commodity futures with New Frontier funds, Fleyshmaker engaged in unauthorized commodity trading, and that by transferring, trading, and failing to return New Frontier funds to investors, Fleyshmakher defrauded investors and misappropriated their funds.
In addition to his activities with New Frontier, the complaint charges that Fleyshmakher defrauded New Millennium investors by making false statements about the performance record of the New Millennium pool when soliciting funds from investors. Specifically, the complaint alleges that Fleyshmakher solicited investors by representing that New Millennium had a performance record when, in fact, the pool had never traded commodities or securities. The complaint further alleges that Fleyshmakher misappropriated New Millennium funds by retaining service fees to which he was not entitled because he performed no legitimate trading services for investors.
A public hearing has been ordered to determine whether the allegations are true and, if so, what sanctions are appropriate in the public interest. Possible sanctions include an order directing Fleyshmakher to cease and desist from violating the CEA, imposing a trading prohibition, and requiring Fleyshmakher to pay a civil monetary penalty as well as restitution to defrauded investors.
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