Release: #5113-05
For Release: September 19, 2005

U.S. COMMODITY FUTURES TRADING COMMISSION ASSISTS IN SUCCESSFUL CRIMINAL PROSECUTION OF STUART MICHAEL HELFFRICH

Helffrich Convicted of Wire Fraud and Fraudulent Conversion of his Customers’ Commodity Futures Positions

WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) today announced that federal prosecutors from the Office of the United States Attorney for the Northern District of Illinois (USAO), with the assistance of the CFTC, obtained a criminal conviction of Stuart Michael Helffrich, age 48, of Chicago, Illinois.

Helffrich, while a registered floor broker at the Chicago Board of Trade, transferred winning trades from his customers’ accounts into his own trading account and “parked” his own losing trades in their accounts, all to cover up mounting losses and to inflate the value of his own personal trading accounts. The scheme went on for approximately six weeks until it was discovered. Helffrich caused trading losses of over $866,000 to two large grain dealers, and to Helffrich’s employer, who ultimately repaid the customers. In addition, the scheme caused the customers to pay additional margin and exposed them to additional market risk.

On May 10, 2005, U.S. District Court Judge Mark Filip issued the guilty verdict, finding “powerful evidence of intent” to defraud. The judge cited the following facts: Helffrich continuously lied to his customers about what happened to the trades; failed to tell customers that the trades were in his own account; and could have fixed any mistakes promptly, had they actually been errors, but did not do so for weeks or months, or sometimes at all.

On September 1, 2005, the Judge sentenced Helffrich to 41 months’ imprisonment, with 3 years’ supervised release at the conclusion of the period of incarceration. In addition, Judge Filip ordered Helffrich to repay his employer more than $800,000.

Susan Berkowitz of the CFTC’s Division of Enforcement (Division) acted as a Special U.S. Attorney in prosecuting Helffrich and obtaining the conviction. The criminal case was the result of a Division referral after the Chicago Board of Trade revoked Helffrich‘s membership and the Commission revoked his registration. In the Matter of Stuart Michael Helffrich, SD 04-08 (Sept. 3, 2004). (See CFTC News Release 4985-04, September 3, 2004.) Division staff members Diane Romaniuk and Mary Beth Spear were responsible for the CFTC’s registration matter.

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Media Contacts
Alan Sobba
(202) 418-5080
Dennis Holden
(202) 418-5088
Office of External Affairs

Staff Contact
Susan Berkowitz
Deputy Chief Counsel
CFTC Division of Enforcement
(312) 596-0719

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