For Release: March 18, 2002
CALIFORNIA COMMODITY TRADER CHARGED WITH MISAPPROPRIATING MORE THAN $500,000 IN CUSTOMER FUNDS AND VIOLATING PRIOR COMMISSION ORDER
CFTC Charges Mark Ross Weinberg with Fraudulently Soliciting Funds to Trade Commodity Futures
Federal Court Freezes Assets and Bars Destruction of Books and Records
WASHINGTON D.C. – The Commodity Futures Trading Commission (CFTC) announced today the filing of a three-count civil injunctive complaint in federal court against Mark Weinberg of Los Angeles, California.
The CFTC complaint, filed on March 12, 2002, charges, among other things, that Weinberg solicited and misappropriated more than $500,000 in customer funds, including commodity pool funds, which were purportedly to be used to trade commodity futures contracts. The complaint also charges that by engaging in such conduct, Weinberg violated a CFTC order entered in a prior CFTC administrative action. That order found that Weinberg had defrauded commodity customers and embezzled and converted customer funds for his own use. The order required him to cease and desist from such fraudulent conduct.
Also, on March 12, 2002, the Honorable Ronald S. W. Lew of the U.S. District Court for the Central District of California entered a restraining order against the defendant, freezing his assets, preventing the destruction or alteration of his books and records and granting the CFTC immediate access to the books and records.
The CFTC complaint specifically alleges that since the summer of 1998, Weinberg has solicited more than $500,000 from at least seven prospective investors for the purpose of investing in commodity futures trading. As further alleged, Weinberg falsely represented to certain customers that he was operating a commodity pool, that the purported pool was trading profitably and the value of the pool had increased to approximately $6.5 million. In fact, Weinberg never traded commodity futures for the pool participants or for any of the other investors, according to the complaint. The complaint charges that Weinberg has misappropriated all of the $500,000 of customer funds and has failed to return to the customers any of their original investments or the purported profits in the commodity pool. As alleged, this conduct violates a prior order of the Commission ordering him to cease and desist from defrauding commodity customers.
In its continuing litigation against the defendant, the CFTC is seeking preliminary and permanent injunctive relief, restitution to customers, disgorgement of ill-gotten gains, and civil monetary penalties. A hearing has been scheduled for March 25, 2002, before Judge Lew on the CFTC’s motion for preliminary injunction.
The following Division of Enforcement staff are responsible for the case: Richard Wagner, Richard Glaser, John Dunfee, and Louis Traeger.
A copy of the complaint and the restraining order may be found at www.cftc.gov.
(For more information on commodity pool fraud, see the CFTC’s Consumer Advisory-Alert of February 26, 2002: “Beware of Commodity Pool Investment Opportunities Promising Large Profits and Little Risk, Even When Offered by Persons You Know.”)
Daniel Nathan, Deputy Director
CFTC Division of Enforcement
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