FEDERAL COURT FREEZES ASSETS OF FLORIDA FIRM AND FIVE INDIVIDUALS CHARGED WITH DEFRAUDING CUSTOMERS OF OVER $6 MILLION
CFTC Alleges that United Investors Group, Inc., Former Director Andrew D. Ross, CEO Paul F. Plunkett, and Traders Greg P. Allotta, Jay M. Levy, and Michael H. Savitsky III, Made False Claims that Customers Would Make Large Profits with Little Risk
WASHINGTON, D.C.—The U.S. Commodity Futures Trading Commission (CFTC) announced today that U.S. District Court Judge Daniel T. K. Hurley issued a statutory restraining order freezing the assets of United Investors Group, Inc. (UIG), and traders Greg P. Allotta, and Michael H. Savitsky III, all of Boca Raton, Florida; Jay M. Levy of Aventura, Florida; Paul F. Plunkett, UIG principal and chief executive officer, of Deerfield, Florida; and Andrew D. Ross, former UIG principal and director, of Boca Raton.
The order, entered on January 3, 2005, stems from a CFTC complaint filed on the same day in the U.S. District Court for the Southern District of Florida, naming UIG, Allotta, Savitsky, Levy, Plunkett, and Ross as defendants and alleging that they violated the Commodity Exchange Act and Commission regulations by defrauding customers they solicited to trade options on commodity futures contracts.
Specifically, the complaint alleges that, beginning in August 2003, UIG and several of its traders, including Allotta, Levy, and Savitsky fraudulently solicited customers to open accounts to trade options through UIG by combining high-pressure sales tactics with fraudulent misrepresentations about the likelihood of profits, the level of risk involved in trading options, and their purported success in trading. The complaint further alleges that, from August 2003 to June 2004, approximately 98 percent of the 364 accounts opened at UIG lost money trading commodity options -- for a total loss of more than $6.1 million -- while, for the same time period, UIG charged more than $4.25 million in commissions and fees.
Further, the complaint names Greg Allotta Enterprises, Inc., and Michael Savitsky, Inc., as relief defendants. Relief defendants are not charged with violations of the law, but they are named solely as persons who may have received funds from a fraudulent scheme. The complaint alleges that Greg Allotta Enterprises and Michael Savitsky, Inc., received commission payments based on the fraudulent conduct of Allotta and Savitsky, respectively.
In its continuing litigation against defendants, the CFTC is seeking preliminary and permanent injunctive relief, return of funds to defrauded customers, repayment of ill-gotten gains, and an award of civil monetary penalties. Judge Hurley has scheduled a hearing for January 17, 2005, on the CFTC’s motion for a preliminary injunction.
The CFTC would also like to thank the National Futures Association for their assistance in this matter.
The following CFTC staff members are responsible for this case: Charles Marvine, Rachel Hayes, Lacey Dingman, and Richard Glaser.
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