MARYLAND FEDERAL COURT ENTERS CONSENT ORDER AGAINST FORMER RESIDENT ANDREW M. SILBERSTEIN IN COMMODITY POOL FRAUD ACTION
In Action Brought by U.S. Commodity Futures Trading Commission and the State of Maryland, Silberstein Is Ordered to Pay Total Sanctions of $560,000
WASHINGTON, D.C. - The U.S. Commodity Futures Trading Commission (CFTC) and the State of Maryland’s Office of Attorney General (Maryland) announced today that as the result of a joint action filed on March 5, 2004, the Honorable Richard D. Bennett of the U.S. District Court for the District of Maryland entered a consent order of permanent injunction (consent order) on February 28, 2005 against former Maryland resident Andrew M. Silberstein.
The joint complaint charged Silberstein with fraud, misappropriation of customer funds, issuance of false account statements, and operating without registration as a commodity pool operator, along with other regulatory violations. (See CFTC News Release 4912-04, April 12, 2004.)
The consent order permanently bars the defendant from: 1) further violations of the anti-fraud provisions of the Commodity Exchange Act (CEA); 2) trading commodity futures or options for himself or others; and 3) engaging in any securities or investment advisory business in Maryland. The order also imposes a civil monetary penalty of $120,000 and orders restitution of $440,000 to be paid to investors.
According to findings in the consent order, Silberstein initially obtained and pooled approximately $632,000 from at least seven investors to trade in S&P futures contracts. The order finds that Silberstein misappropriated approximately $146,000 of the pool funds for his personal use and lost approximately $220,000 in trading. Furthermore, the order finds that Silberstein concealed his misappropriation of funds and trading losses from the pool participants by issuing false account statements showing that his trading on their behalf was profitable. The restitution order reflects the total amount of funds that continue to be owed to the investors.
The CFTC appreciates the cooperation of the Securities Division of the Maryland Attorney General’s Office in this matter.
The following CFTC Division of Enforcement staff were responsible for this action: Kevin K. Batteh, Erin Vespe and Gretchen L. Lowe.
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