Release #3966-96 (4-96-CV-70005)
For Release:November 14, 1996
CFTC REACHES SETTLEMENT WITH IOWA STATE BANK & TRUST OF FAIRFIELD, IOWA, WHICH WAS NAMED AS A RELIEF DEFENDANT IN A CFTC ANTI-FRAUD ACTION FILED IN JANUARY 1996
Bank Agrees to Pay Restitution of About $565,000 to Alleged
Defrauded Investors in a Commodity Pool Operated by Mark S. Shaner
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that it has reached a settlement on November 7, 1996, with Iowa State Bank and Trust Company of Fairfield, Iowa, stemming from a four-count injunctive complaint filed in January, 1996, in the U.S. District Court for the Southern District of Iowa in Des Moines.
The complaint alleges that Mark S. Shaner and Shaner Trading Partners, Inc., a commodity pool, both of Fairfield, Iowa, defrauded commodity pool participants, and the complaint names the Iowa State Bank and Trust Company and Jane F. Shaner as relief defendants.
Under terms of the settlement, Iowa State Bank and Trust has agreed to pay about $565,000 in restitution to investors in a commodity pool. The CFTC's litigation against the other defendants in the action is still pending.
Specifically, the complaint alleges that Shaner Fund Limited Partnership, a commodity pool organized in early 1994, purchased a certificate of deposit from the bank with pool funds, and that Mark S. Shaner later permitted the bank to use the proceeds of the certificate of deposit to pay Shaner's personal and business debts to the bank. Both Shaner and Shaner Trading Partners are general partners of Shaner Fund Limited Partnership.
The complaint further alleges that the Iowa State Bank and Trust Company was unjustly enriched when it accepted $521,804.85 in proceeds from the certificate of deposit. In the settlement the bank agreed to pay the investors that amount, plus approximately $44,000 in prejudgment interest.
The complaint also alleges that Mark S. Shaner and Shaner Trading Partners, Inc. violated the Commodity Exchange Act by cheating and defrauding investors, engaging in commodity pool fraud, and converting pool assets.
The court, on January 4, 1996, entered an ex parte restraining order freezing the assets of Shaner and Shaner Trading Partners and prohibiting the defendants from destroying books and records and from denying CFTC representatives access to such records. (See CFTC News Release #3887-96, January 18, 1996.)