BRITISH COLUMBIA CITIZEN KEVIN STEELE CHARGED WITH DEFRAUDING OVER 200 PARTICIPANTS, INCLUDING U.S. RESIDENTS, IN $7.5 MILLION COMMODITY POOL SCHEME
Scheme Touched Victims Worldwide
WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today that on May 26, 2005, the Honorable Milton I. Shadur of the United States District Court for the Northern District of Illinois, acting on a CFTC enforcement complaint filed on May 25, 2005, issued a restraining order freezing the assets of defendant Kevin J. Steele, a Canadian citizen with a Mexican national ID, and prohibiting Steele from destroying books and records. CFTC v. Kevin J. Steele, No. 05C 3130 (N.D.Ill.).
The CFTC complaint charges Steele with violating the anti-fraud provisions of the Commodity Exchange Act (CEA) in his operation of a commodity pool. According to the complaint, between December 2002 and May 2005, Steele touted the success of his trading as he solicited and accepted at least $7.5 million for his commodity pool from at least 200 investors worldwide. The CFTC has learned that a large proportion of the participants reside in the Canadian Province of British Columbia, but some are U.S. residents and others reside in Germany, Italy, Japan, and Greece.
The CFTC complaint alleges that Steel pooled the participants’ funds to trade such commodity futures as the E-mini S&P and e-CBOT Treasury Bond contracts. As alleged, Steele traded these futures contracts through at least two accounts at a futures broker located in Chicago, Illinois. The complaint further alleges that Steele issued false statements reflecting monthly profits from that trading, when, in reality, he lost at least $3 million trading.
Steele also is charged with acting as a commodity pool operator without being registered with the CFTC.
In the continuing litigation, the CFTC is seeking preliminary and permanent injunctions, orders requiring the repayment of funds to defrauded participants and the return of ill-gotten gains, and an order imposing civil penalties.
The following CFTC Division of Enforcement staff members are responsible for this case: Ava M. Gould, Diane M. Romaniuk, Mary E. Spear, Donald G. Nash, Daniel A. Nathan, Grant Collins and Scott R. Williamson.
The CFTC also appreciates the assistance it has received from the Integrated Market Enforcement Branch of the Royal Canadian Mounted Police’s Federal and International Operations Directorate, and the British Columbia Securities Commission.
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