Release: 4503-01 (CFTC Docket # 01-04)
For Release: April 4, 2001
CFTC SETTLES ENFORCEMENT ACTION AGAINST ISAAC FLEYSHMAKHER FOR COMMODITY POOL FRAUD
CFTC Order Finds 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; Order Requires Him to Pay Restitution to Defrauded Investors, Among Other Sanctions
WASHINGTON - The Commodity Futures Trading Commission (CFTC) announced today the issuance of an order accepting an offer of settlement from Isaac Fleyshmakher of Chicago, Illinois. The order settles a CFTC complaint filed against Fleyshmakher on November 29, 2000 (see CFTC News Release 4477-00, November 29, 2000).
The order finds 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 order also finds that Fleyshmakher misrepresented the performance record of the New Millennium pool to investors. Fleyshmakher consented to the entry of the order without admitting or denying its findings.
Specifically, as the order finds, from July 1998 through February 2000, Fleyshmakher solicited investors for and managed two separate investment pools, New Frontier and New Millennium. The order finds that Fleyshmakher defrauded New Frontier investors by transferring some investor funds, which had been solicited to trade securities, into a commodity trading account without their knowledge and consent. The order also finds that by trading commodity futures with New Frontier funds, Fleyshmakher engaged in unauthorized trading and that by transferring, trading, and failing to return those funds to New Frontier investors, he misappropriated the funds.
In addition, the order finds that Fleyshmakher defrauded New Millennium investors when soliciting funds by making false statements about the performance record of the New Millennium pool. Fleyshmakher, the order finds, solicited investors by representing that New Millennium had a performance record when, in fact, the pool had never traded commodities or securities. In addition, the order finds 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.
Finally, the CFTC order finds that Fleyshmakher violated section 4m(1) of the CEA by acting as a commodity pool operator (CPO) of the New Frontier and New Millennium commodity pools and failing to register with the Commission in that capacity.
The CFTC order:
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