CFTC News Release 4492-01 (CV 99-00653)
For Release March 1, 2001
FEDERAL COURT IN HAWAII PERMANENTLY ENJOINS DAVID T. MARANTETTE, III FROM COMMITTING COMMODITY FRAUD WHEN SOLICITING CUSTOMERS TO INVEST IN COMMODITY POOLS AND PURCHASE COMMODITY TRADING ADVISORY SERVICES
The Consent Order Imposes a Permanent Injunction and Trading Ban and Requires Marantette and his Company, Troubadour, Inc., to Make Restitution to Investors of Up to Approximately $2.25 Million
WASHINGTON – The Commodity Futures Trading Commission (CFTC) announced today that the United States District Court for the District of Hawaii has entered a consent order of permanent injunction, restitution, contingent civil monetary penalties, and other equitable relief against David T. Marantette, III and Troubadour, Inc. (Troubadour), both of Princeville, Hawaii, in connection with the fraudulent solicitation of customers to invest in commodity pools and to purchase commodity trading advisory services.
The consent order, entered on February 21, 2001, arises out of a complaint filed by the CFTC on September 22, 1999, charging the defendants with violating the anti-fraud, registration and disclosure and reporting requirements of the Commodity Exchange Act (CEA) (see CFTC News Release 4327-99, October 21, 1999). Marantette, on behalf of himself and Troubadour, agreed to the consent order without admitting or denying the findings of the order.
The consent order finds that, commencing in 1995, Marantette and Troubadour, without being registered with the CFTC as commodity pool operators, began fraudulently soliciting members of the public to participate in a series of commodity pools. The consent order further finds that Marantette and Troubadour fraudulently misrepresented to prospective newsletter customers and commodity pool investors the profitability of the trading recommendations they made in their newsletters, by mischaracterizing hypothetical trading as actual trading, by commingling and misappropriating commodity pool funds, and by sending false trading account statements to their commodity pool investors that reported fictitious profits from trading. Losses suffered by their commodity pool investors were in excess of $1.8 million, according to the order.
The consent order requires Marantette and Troubadour to pay restitution to commodity pool investors of up to approximately $2.25 million, and to pay a contingent civil monetary penalty of up to $700,000, pursuant to an income-based, ten-year payment plan. The order also enjoins them from further violating the provisions of the CEA and CFTC regulations as charged and permanently bars them from trading for themselves or others or from seeking registration with the CFTC.
Marantette was the subject of four prior administrative and injunctive proceedings brought by the Securities and Exchange Commission (SEC) from 1974 through 1992. In particular, in 1992 orders were entered against him in SEC proceedings permanently enjoining him from violating the antifraud provisions of the securities laws and barring him from association with any broker, dealer, investment advisor, investment company or securities dealer.
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