For Release: April 2, 2002
THREE FORMER EMPLOYEES OF CHICAGO COMMODITY FIRM SETTLE GOVERNMENT ACTION FOR FRAUDULENT TRADING
Defendants Martin Brown, Geoffrey S. Thompson, and Ydiyell Howard Prohibited From Trading in the Commodity Markets
WASHINGTON – The Commodity Futures Trading Commission (CFTC) announced today the filing of an amended complaint and the simultaneous settlement of an enforcement action against Martin Brown, Geoffrey S. Thompson and Ydiyell Howard, of Chicago, Illinois. The original complaint, filed on November 21, 2000, in the United States District Court for the Northern District of Illinois, Eastern Division, charged Brown and Thompson with carrying out a fraudulent trade allocation scheme and unauthorized trading while they were employed at F.C. Stone, a Chicago futures commission merchant (See CFTC News Release 4476-00, November 22, 2000). In the amended complaint, Ydiyell Howard, a co-worker of Brown and Thompson, is charged with aiding and abetting the fraud.
Specifically, the CFTC alleges that, from at least February 2000 through October 2000, Brown and Thompson, aided and abetted by Howard, engaged in unauthorized trading and fraudulently allocated commodity interest trades by placing losing trades in customer accounts and winning trades in the accounts of friends and relatives. The complaint further alleges that the allocation scheme resulted in profits of approximately $2.3 million to the defendants, and their friends and relatives, and losses of about $1.3 million to victim customer accounts. All but $200,000 of the ill-gotten gains was recovered due to an early asset freeze obtained by the CFTC.
The consent orders, entered on March 27, 2002, among other things, require Brown and Thompson jointly and severally to pay total remaining restitution of $200,000, pursuant to a ten year payment plan. Howard is also jointly and severally liable to pay up to $91,975, also pursuant to a ten-year payment plan. The orders also require Brown, Thompson, and Howard to disgorge any personal gain made from the fraud in the amounts of $229,734, $297,938, and $33,500, respectively, with those amounts to be offset by any payments of restitution. The orders further require Thompson, Brown, and Howard to pay contingent civil monetary penalties, following satisfaction of their restitution obligations, of up to $229,734 by Brown, $297,937 by Thompson, and $55,000 by Howard. In consenting to the orders, Brown, Thompson, and Howard neither admitted nor denied the allegations of the complaint. They all agreed to cooperate with the Commission in future actions related to their scheme.
The consent orders also permanently bar Brown, Thompson, and Howard from further violations of the Commodity Exchange Act, as charged in the complaint, from trading for themselves or others, and from seeking registration or claiming exemption from registration with the CFTC or acting as principals, agents, officers or employees of any person registered, required to be registered, or exempt from registration, except as provided in Commission regulation 4.14(a)(9).
The CFTC action also named as relief defendants Brown’s sister, Brenda Brown, her company, Prairie Garden Condos, Inc., Brown’s girlfriend, Javette King, and Thompson’s sister and friend, Loren Hayes and Bernadette Thomas. Brenda Brown, and Prairie Garden Condos were dismissed after disgorging more than $700,000 of ill-gotten gains that were siphoned into bank accounts Brown controlled as part of the scheme. The federal court entered a consent order, also on March 27, 2002, against Javette King, requiring her to disgorge $226,922, plus pre-judgment and post-judgment interest pursuant to a ten-year payment plan. The action against relief defendants Hayes and Thomas is still pending.
The following Enforcement staff is responsible for the case: Scott Williamson, Elizabeth Streit and Ava Gould.
Complaint and Consent Orders
Brown Thompson Complaint
Brown Thompson Attachment A
Howard Consent Order
King Consent Order
Thompson Consent Order
Brown Consent Order
Media Case Contact:
Scott Williamson, Acting Regional Counsel
Central Regional Office
Division of Enforcement
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