Release:#3877-95 (Civ 95-6970)
For Release:November 3, 1995
FLORIDA COURT ISSUES PRELIMINARY INJUNCTION IN CFTC ANTI-FRAUD ENFORCEMENT ACTION AGAINST RICHARD E. MASERI, RONALD B. ROMBERG, AIM INTERNATIONAL, BULLSEYE INTERNATIONAL, & PRIVATE RESEARCH, INC.
Injunction Continues Previously Entered Ex Parte Asset Freeze Order Against the Defendants, Who Allegedly Defrauded Commodity Futures Investors of Over $350,000
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that the Honorable Edward B. Davis of the U.S. District Court for the Southern District of Florida entered orders of preliminary injunction against Richard E. Maseri of Aventura, Florida; Ronald Bruce Romberg of Lighthouse Point, Florida; and Private Research, Inc., AIM International, Inc., and Bullseye, Inc. -- all Florida corporations operated and controlled by Maseri and/or Romberg.
The court's action stems from a six-count injunctive complaint filed on October 16, 1995, alleging that since January 1993 the defendants cheated and defrauded customers throughout the United States by soliciting and receiving funds for the purchase of computer- generated commodity futures trading systems and soliciting approximately $350,000 to trade commodity futures contracts. The CFTC complaint also charges the defendants with acting as a commodity trading advisor, a commodity pool operator, and a futures commission merchants without being so registered with the CFTC.
Specifically, the complaint charges Maseri, Romberg, AIM, and Bullseye with, among other things, cheating and defrauding customers by misrepresenting to customers:
that AIM was trading an account in its own name using the CAT-FX trading system developed by Maseri, which was purported to be a computer-assisted commodity futures trading program, and that the AIM account was generating profits of between 5 percent and 15 percent per week;
that, for 23 weeks from September 1994, the AIM in-house account had traded using the CAT-FX trading system and had not, at any time, lost money; and
that the CAT-FX trading system was designed so that gains would outnumber losses by 55 percent to 60 percent, and that Maseri had completely tested the system and had made as much money as he wanted to, before making the system available to the public in late 1994.
The complaint alleges that, in fact, AIM never had any trading account, no actual profits were ever made by AIM or Romberg in any real trading account, and the representations made concerning the purported success of the CAT-FX system was exclusively based upon hypothetical trading.
The complaint also charges Maseri and Private Research with converting customer funds to their own use, and with cheating and defrauding customers by:
misrepresenting that everyone who had ever invested with Maseri had "always made money" as a result of Maseri's trading"; and
misrepresenting that Maseri was a licensed commodity pool operator and commodity trading advisor.
AIM markets the CAT-FX trading system in national newspaper advertisements, including the business opportunity sections of the Wall Street Journal and USA Today. Maseri has also made claims about his CAT-FX system on the "Money Talk Bulletin Board" of Prodigy, an on-line computer service that reaches millions of persons, according to the complaint. The complaint also alleges that the defendants offered at least three different CAT-FX trading products: the purchase of the CAT-FX program for fees up to $19,000; a license to operate a franchise or an AIM affiliate office for a $50,000 fee; and interests in a purported commodity pool named Bullseye Fund, which was represented to be trading according to the CAT-FX system.
Injunctions Enjoin Defendants from Further Violating Federal Commodity Law
On the same day the complaint was filed, Judge Davis issued an ex parte order freezing all of the defendants' assets, preserving their books and records, and appointing a receiver.
The preliminary injunctions, entered on October 23 and 25, 1995, among other things, enjoin the defendants from further violations of Federal commodity law, including the anti-fraud, registration, and disclosure provisions of the Commodity Exchange Act. Maseri and Private Research were also enjoined from violating the Act's prohibitions against embezzlement and/or conversion, and acting as a futures commission merchant without being registered.
Judge Davis further ordered that the ex parte order of October 16 remain in effect, except that the temporary receiver's appointment was terminated, and Magistrate Judge Garber was appointed to take into his custody and control the assets of the corporate defendants and to remove Maseri and Romberg from control of those corporations. Moreover, the CFTC was directed to take possession of all of the defendants' records relating to the activities alleged in the CFTC complaint. Finally, the defendants were required to provide a summary accounting of their assets and provide CFTC representatives with access to the defendants' books and records.
CFTC's Continuing Litigation Seeks Fines, Disgorgement, and Restitution,
Among other Sanctions
In its continuing litigation against the defendants, the CFTC is seeking an order of permanent injunction, civil monetary penalties (an amount of not more than the higher of $100,000 or triple the monetary gain to the defendants for each violation of the Act or CFTC regulations), rescission of all violative transactions, disgorgement, and restitution.