U.S. DISTRICT COURT ORDERS UNITED KINGDOM CORPORATION AND ITS TWO PRINCIPALS TO PAY $50,000 IN CIVIL PENALTIES FOR INTERNATIONAL SOLICITATION OF OFF-EXCHANGE COMMODITY FUTURES THROUGH THE WORLD WIDE WEB
WASHINGTON, D.C.— The U.S. Commodity Futures Trading Commission (CFTC) announced today that the U.S. District Court for the Western District of Kansas issued a consent order of permanent injunction against E Net Speculation Ltd. (ENet), a United Kingdom corporation operating out of Uruguay; Patrice Cornaz, a Swiss resident; and Athos Socratous, a French resident, prohibiting them from soliciting or accepting any funds from any resident of the United States or its territories in connection with the purchase or sale of commodity futures or options on commodity futures contracts without first obtaining approval by the CFTC. The court’s order also requires them to pay a civil monetary penalty of $50,000.
The order, entered on December 1, 2004, by the Honorable Charles R. Simpson, in which the defendants neither admitted nor denied the findings of fact, settles CFTC charges against the defendants arising out of the CFTC’s March 19, 2004, complaint in CFTC v. E Net Speculation, et al., 3-04cv169 (see CFTC News Release 4918-04, April 22, 2004).
The complaint charged defendants with engaging in the offer and sale of off-exchange commodity futures contracts to residents of the United States, and further charged them with “bucketing,” a practice that involves a broker’s taking the other side of a customer order without causing the orders to be competitively traded.
Specifically, the complaint alleged that since at least June 2001, E Net solicited U.S. retail customers to trade illegal, off-exchange futures contracts through its three websites. According to the complaint, the websites claimed that E Net “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.” The complaint alleged that E Net itself is not, and never has been, a board of trade or trading facility approved by financial regulators in the U.S.
The complaint did not allege any violations of law involving defendants’business with non-U.S. residents.
The following CFTC Division of Enforcement staff members were responsible for this case:Catherine Fuller, Joy McCormack, Jackie Mesa, Cynthia Cannon, Scott Williamson, and Rosemary Hollinger.
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