Release: 4859-03
For Release: October 24, 2003 (To view complaint, click here)

U.S. COMMODITY FUTURES TRADING COMMISSION CHARGES CONNECTICUT MAN AND HIS COMPANY WITH BILKING COMMODITIES INVESTORS IN FRAUDULENT POOL SCHEME

Burton Friedlander and Friedlander Capital Management Corporation Allegedly Misappropriated More than $1.3 Million to Pay for Boats, Cars, Country Club Dues, and Legal Expenses

WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of a civil action in the Southern District of New York against Friedlander Capital Management Corporation (FCMC) and its sole owner and operator, Burton G. Friedlander (Friedlander), both of Greenwich, Connecticut, for allegedly operating a fraudulent commodities and securities pool (CFTC v. Friedlander Capital Management Corporation and Burton G. Friedlander, Civil Action No.: CV: 03-8319).

The complaint, filed October 21, 2003, alleges that, from 1998 through 2001, FCMC and Friedlander solicited customers to invest in a commodity pool. As charged, instead of placing all the pool money into trading accounts, FCMC and Friedlander used more than $1.3 million of customer funds to pay for personal and business expenses, including boats, automobiles, country club dues, and legal expenses.

The complaint further alleges that FCMC and Friedlander perpetuated and concealed their misappropriation of customer funds by routinely sending customers false compilation reports that claimed the pool was generating significant profits when, in fact, the pool was suffering losses. In addition, the complaint alleges that FCMC and Friedlander sent the false compilation reports to pool customers on the forged stationery of a major accounting firm, and that the accounting firm neither authorized FCMC or Friedlander to use its letterhead nor participated in the preparation of the false compilation reports.

The complaint seeks various sanctions, including a permanent injunction, monetary penalties, and other relief, such as an accounting for use of funds and the repayment of ill-gotten gains and customer losses.

The CFTC action is filed in conjunction with an amended complaint filed by the Securities and Exchange Commission and a criminal indictment obtained by the United States Attorneys’ Office for the Southern District of New York against the same defendants based on the same set of facts.

The following Division of Enforcement staff are responsible for this case: Frank Rangoussis, Elizabeth Padgett, and Richard Glaser.

CFTC Media Enforcement Contact:
Richard Glaser, Associate Director
CFTC Division of Enforcement
(202) 418-5358

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