FEDERAL COURT FREEZES ASSETS OF FLORIDA ILLEGAL OFF-EXCHANGE METALS OPTIONS FIRM AND TWO CORPORATE OFFICERS
U.S. Commodity Futures Trading Commission Charges E-Metal Merchants, Inc., Benji Dayan, And Andrew Stern With Illegal Metals Options Trading
WASHINGTON, D.C. -- The U.S. Commodity Futures Trading Commission (CFTC) announced today that U.S. District Court Judge Joan A. Lenard entered a restraining order freezing the assets of E-Metal Merchants, Inc., a Florida corporation based in Aventura, Florida, and two of its corporate officers, Benji Dayan and Andrew Stern, both of Miami, Florida.
The order, entered on June 13, 2005, stems from a CFTC complaint filed earlier that day in the United States District Court for the Southern District of Florida, charging defendants with purchasing and selling illegal, off-exchange metals options in violation of the Commodity Exchange Act and CFTC regulations. Judge Lenard has scheduled a hearing for July 7, 2005 on the CFTC’s motion for a preliminary injunction.
E-Metal Merchants Accepted over $6.9 Million from More Than 200 Customers
Specifically, the CFTC's complaint charges that -- since at least May 2004 -- E-Metal Merchants accepted over $6.9 million from more than 200 customers for the purpose of engaging in the purchase and sale of illegal off-exchange metals option contracts.
According to the complaint, E-Metal Merchants transferred more than $5.4 million from its customers’ account to the firm’s operating account, $575,000 to the firm’s off-shore account in New Zealand, and $509,000 to Universal Financial Holding Company, a firm owned by the secretary of E-Metal Merchants, Andrew Stern.
As further alleged, that firm paid the president of E-Metal Merchants, Benji Dayan, and the secretary, Stern, over $1 million from customer funds. Dayan and Stern are controlling persons of E-Metal Merchants and, therefore, are liable for the firm’s violations of the CEA, the complaint alleges.
In its continuing litigation against defendants, the CFTC is seeking preliminary and permanent injunctive relief, return of customer funds received in the purchase and sale of the illegal options, return of ill-gotten gains, and an award of civil monetary penalties for each violation of the CEA.
The following CFTC Division of Enforcement staff members are responsible for this case: Jan M. Folena, Lacey Dingman, Richard Glaser, and Richard Wagner.
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