KANSAS FEDERAL COURT ORDERS CALIFORNIA RESIDENT DEREK ABRAHAMS TO PAY CIVIL PENALTY FOR FRAUDULENTLY PROMOTING COMMODITY TRADING SYSTEMS
Washington, D.C. — The United States Commodity Futures Trading Commission (CFTC) announced today that the Honorable Carlos Murguia, United States District Judge for the District of Kansas, issued a consent order of permanent injunction prohibiting defendant Derek Abrahams, a California resident, from engaging in any business activities related to commodity futures and options trading. The court’s order also requires Abrahams to pay a civil monetary penalty of $50,000.
The order, entered on April 19, 2005, settles charges against defendant Abrahams arising from the CFTC’s April 22, 2003 complaint in CFTC v. Wall Street Underground, Inc., et al., Civil Action No. 032193-CM (D. Kan.), which charged Abrahams and several others as participants in a fraudulent scheme to sell commodity futures and options trading systems (see CFTC News Release 4778-03, April 25, 2003).
Specifically, according to the court’s order, the advertising for these systems overstated the profit potential of the trading systems, failed to adequately warn of the risks inherent in trading commodity futures and commodity options, and made false money-back guarantees. The court’s order finds that Abrahams directly or indirectly controlled some of the financial and corporate activities of the entities involved in the scheme.
The court’s order settles the CFTC’s charges against Abrahams, although the case proceeds as to the remaining defendants.
In consenting to the order, Abrahams neither admitted nor denied the findings in the order.
The following CFTC Division of Enforcement staff members are responsible for this case: Catherine Fuller, Donald Nash, Venice Bickham, Scott Williamson, Rosemary Hollinger, and Joan Manley.
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