For Release: February 11, 2002
COMMODITY TRADER AND TWO MICHIGAN COMPANIES CHARGED WITH $2.9 MILLION FRAUD; GOVERNMENT ALLEGES FICTITIOUS TRADING
Federal Court Freezes Assets and Bars the Destruction of Books and Records.
WASHINGTON D.C. - The Commodity Futures Trading Commission (CFTC) announced today the filing of a complaint in federal court on February 8, 2002, against Todd J. Snively of Michigan, Commodity Consultant International, Inc. (CCI) and FutureWise Trading Group, Inc. (Futurewise). The complaint charges defendants with fraudulently operating an internet-based trading platform which purportedly permitted investors to place orders for commodity futures contracts through CCI and Futurewise and alleges that defendants misappropriated investors’ funds. According to the complaint, defendants solicited and accepted at least $2.9 million from at least 60 people.
Also, on February 8, 2002, the Honorable Paul V. Gadola of the U.S. District Court for the Eastern District of Michigan entered a statutory restraining order by consent against the defendants, freezing their assets, preventing the destruction or alteration of their books and records, and granting CFTC staff immediate access to those records.
The CFTC complaint alleges that, since at least June 2001 and continuing through the present, Snively, CCI, and FutureWise, all of whom are CFTC registrants, solicited and accepted at least $2.9 million from at least 60 members of the general public, for the purported purpose of trading commodity futures. The complaint alleges that investors could either trade for themselves on the platform or place trades through CCI and FutureWise. According to the complaint, however, no trading occurred on behalf of investors. Instead, the complaint alleges, the defendants misappropriated some of the investors’ funds for their own use. The complaint further alleges that defendants induced investors to maintain and add to their investments by providing account statements over the Internet that reflected investors’ purportedly profitable futures trading.
CFTC Chairman James Newsome said:
“Investor protection and market integrity are the Commission’s primary objectives. In this case, our Chicago enforcement staff, in coordination with the National Futures Association, moved swiftly to protect investor funds and halt this alleged fraudulent activity. This is a good example of how the Commission works together with a front-line regulator to produce positive results. I will continue to promote the use of all of our regulatory authority to make sure that we uproot and prosecute all fraudulent activity in the futures markets.”
In its continuing litigation against the defendants, the CFTC is seeking preliminary and permanent injunctive relief, an accounting, restitution to customers, disgorgement of ill-gotten gains, and civil monetary penalties of not more than the higher of $120,000 for each violation or triple the monetary gain to Defendants, among other remedial relief. A hearing has been scheduled for Wednesday, March 6, 2002, before Judge Paul V. Gadola on the CFTC’s motion for preliminary injunction.
The National Futures Association (NFA), a futures industry self-regulatory organization, provided substantial assistance to the CFTC in this matter. Public inquiries can be directed to the CFTC at firstname.lastname@example.org or to the NFA at 800-621-3570.
To obtain a copy of the complaint and order, go to the following Internet address: http://www.cftc.gov.
Media Case Contact:
Scott R. Williamson
Acting Regional Counsel, Central Regional Office
CFTC Division of Enforcement
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