For Release: November 10, 2003
MICHIGAN ATTORNEY, CHARLES G. MADY, ORDERED TO PAY MORE THAN
$8 MILLION TO DEFRAUDED COMMODITY POOL INVESTORS
Court Bans Defendant From Trading for His Own Account for 10 Years and Permanently Bans Him from Trading Commodity Futures or Options for Others
WASHINGTON, D.C. - The U.S. Commodity Futures Trading Commission (CFTC) announced today that the United States District Court for the Eastern District of Michigan issued a consent order requiring attorney Charles G. Mady of Northville, Michigan, to pay back over $8.2 million to 30 defrauded investors, and imposing other sanctions.
The consent order, entered on November 8, 2003, by the Honorable Victoria A. Roberts, settles CFTC charges against Mady arising out of the CFTC’s June 11, 2002 complaint in CFTC v. Charles G. Mady and Relief Defendants Mady Futures, Inc. and Mady Funding Company LLC., 02-73294 (see CFTC News Release 4655-02, June 12, 2002).
The order finds that Mady, who operated a commodity pool, did not disclose to investors that the pool had sustained over $4 million in trading losses. The order further finds that Mady misappropriated $1 million from the commodity pool funds.
Mady neither admitted nor denied the allegations in the complaint or the findings of fact or conclusions of law contained in the consent order. The CFTC and Mady agreed to the dismissal of the two relief defendants named in the enforcement action from the case.
The court-appointed receiver, Rodger D. Young of Young & Susser, PC, Southfield, Michigan (see CFTC News Release 4686-02, August 5, 2002) will distribute just over $1.2 million to defrauded customers, representing all of the assets Mady had available for liquidation. The order requires Mady to repay the remaining $7 million pursuant to a ten-year payment plan. The order also imposes on Mady a contingent civil monetary penalty of $8.2 million, dependant on whether he repays customers.
In addition to prohibiting Mady from future violations of the Commodity Exchange Act, the court's order permanently prohibits Mady from soliciting, accepting funds, or trading commodity futures or options for others and bans Mady for ten years from trading futures on his own behalf.
The CFTC gratefully acknowledges the assistance provided by the Office of the United States Attorney for the Eastern District of Michigan.
The following CFTC Division of Enforcement staff were responsible for the case: Clifford Histed, Ralph DerAsadourian, Cynthia Cannon, Hugh Rooney, Elizabeth M. Streit, Scott R. Williamson, and Rosemary Hollinger.
Media Enforcement Contact:
Rosemary Hollinger, (312) 596-0520
Associate Director/Chicago Regional Counsel
CFTC Division of Enforcement
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