Release: 4622-02 (CFTC Docket #01-24)
For Release: March 20, 2002


Alfred Gladstone Ordered to Pay Up To $171,000 in Restitution and Civil Monetary Penalty Pursuant to Payment Plan and Agrees Never to Seek CFTC Registration

WASHINGTON, D.C. -- The U.S. Commodity Futures Trading Commission (CFTC) announced today the settlement of an enforcement action filed on September 4, 2001, against Alfred Gladstone of Woodland Hills, CA. The CFTC complaint alleged that Gladstone, while working at the Los Angeles Branch of the commodity firm FSG International, Inc., fraudulently solicited customers to purchase commodity options (see CFTC News Release 4565-01, September 4, 2001).

The CFTC settlement order finds that, from approximately January 1998 to May 2000, Gladstone fraudulently solicited customers to trade options on commodity futures (commodity options) by falsely claiming that customers would realize large profits from trading commodity options, minimizing the risks involved, and misrepresenting the performance record of his customers. For example, the order finds that Gladstone claimed that he was offering investors “a sure bet” and that they could easily triple their investment. The order further finds that Gladstone fraudulently reassured customers that his “sound advice” would make them money, that all his customers were making money, that he made millions for his customers, and that his customers would be among the 10 percent of commodity investors that make “big bucks.” In sharp contrast to those fraudulent claims, the order finds that nearly 99 percent of Gladstone’s customers who closed accounts over a two-year period lost all of the funds they invested.

In consenting to the entry of the order, Gladstone neither admitted nor denied the allegations in the complaint or the order’s findings. The order:

  1. requires Gladstone to cease and desist from violating the Commodity Exchange Act, as charged;
  2. 2) requires Gladstone to pay restitution, including prejudgment interest, totaling $61,058.92, pursuant to a ten-year payment plan;
  3. 3) requires him to pay a civil monetary penalty of up to $110,000, pursuant to a ten-year payment plan; and
  4. 4) orders him to comply with his undertakings, including never to seek registration or exemption from registration, act in any capacity requiring CFTC registration or exemption from registration, or act as a principal, agent or officer of any person registered, required to be registered, or exempt from registration, except as permitted by Commission rule 4.14(a)(9).

The following Division of Enforcement staff are responsible for the case: Richard Wagner, Jason Gizzarelli, Karen Kenmotsu and Kay Majors-Guy.

Media contact:
Richard Wagner, Associate Director
CFTC Division of Enforcement
(202) 418-5390

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