U.S. COMMODITY FUTURES TRADING COMMISSION CHARGES UNITED KINGDOM CORPORATION AND ITS TWO PRINCIPALS WITH SALE OF ILLEGAL OFF-EXCHANGE FUTURES CONTRACTS TO U.S. INVESTORS
CFTC Alleges that E Net Speculation Ltd., Patrice Cornaz, and Athos Socratous Illegally Solicit U.S. Investors Via the Internet to Trade Commodity Futures Contracts through a Foreign Website
WASHINGTON, D.C. -- The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of a civil injunctive complaint against E Net Speculation Ltd. (E Net), a United Kingdom corporation, Patrice Cornaz, a Swiss resident, and Athos Socratous, a French resident, alleging violations of the Commodity Exchange Act.
The CFTC complaint charges the defendants with engaging in the offer and sale of illegal off-exchange commodity futures contracts to U.S. retail investors, and with bucketing, conduct that involves taking the other side of customer orders without causing the orders to be competitively traded.
Specifically, the complaint alleges that, since at least June 2001, E Net has solicited U.S. retail customers to trade illegal off-exchange futures contracts through its three websites: www.enetspeculation.com, www.enetspeculation.net, and www.enetspeculation.org. According to the complaint, the web sites claim that E Net has “offered via the Internet network and by way of the mini-financial-market system which it developed, a service of Off Exchange execution of orders to buy and sell fractions of standard futures contracts and non-standard foreign exchange contracts.” However, the complaint alleges, the “mini-contracts” that the defendants claim to have developed are actually illegal, unlicensed, small-sized imitations of futures contracts that are offered legally on major exchanges throughout the world.
In addition, according to the complaint, E Net itself is not, and has never been, a board of trade or trading facility approved by financial regulators in the United States, France, the United Kingdom, or Switzerland, and E Net has not been authorized by any major exchange to offer the "mini-contracts."
U.S. Federal Judge Enters Preliminary Order Enjoining E Net from Conducting Business in the United States
On April 21, 2004, the Honorable Charles R. Simpson of the U.S. District Court for the Western District of Kentucky entered an order of preliminary injunction, to which the defendants consented, restraining E Net from offering futures contracts to residents of the United States during the pendency of the case.
The following CFTC Division of Enforcement staff members are responsible for this case: Catherine Fuller, Joy McCormack, Jackie Mesa, Clifford Histed, Cynthia Cannon, Scott Williamson, and Rosemary Hollinger.
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