For Release:April 30, 1996
COLORADO COURT ISSUES PRELIMINARY INJUNCTIONS AGAINST BRIAN PRENDERGAST AND JOEL de ANGELIS IN CFTC ANTI-FRAUD ACTION AGAINST PRISM FINANCIAL CORPORATION OF ENGLEWOOD, COLORADO
Injunctions Continue the Court's Earlier Asset Freeze Order
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced that the Honorable Wiley Daniel, U.S. District Court Judge for the District of Colorado in Denver, entered an order of preliminary injunction against Brian Prendergast, president and a principal of Prism Financial Corporation, an Englewood, Colorado firm, in a CFTC action filed on February 20, 1996 (CFTC News Release #3892, February 20, 1996). Joel de Angelis, a principal of Prism who resides in Los Gatos, California, had previously consented to the entry of a preliminary injunction in the action on February 29, 1996.
The injunctive orders continue in effect the provisions of the court's February 26, 1996, statutory ex parte restraining order, which froze the defendants' assets, prohibited the destruction of books and records, and granted the CFTC access to such books and records.
The court's preliminary injunctive relief prohibits Prendergast and de Angelis from violating the anti-fraud, registration, disclosure, reporting, and recordkeeping provisions of the Commodity Exchange Act (CEA) and CFTC regulations. Prendergast and de Angelis are also prohibited from acting in any capacity requiring CFTC registration, and from soliciting or accepting new deposits of customer funds. Finally, Prendergast and de Angelis are required to each make an accounting of their assets.
In the order of preliminary injunction entered against Prendergast, the court authorized Daniel Driscoll, Vice President for Compliance at the National Futures Association, to take custody of the books and records of Prendergast, Prism, and its commodity pool (Prism Limited Liability Company), to interview all principals of the companies, and to provide to the court within 60 days an accounting of all financial, and commodity and securities trading activities of the companies and their principals.
In its continuing litigation against the defendants, the CFTC is seeking permanent civil injunctions, to include, among other sanctions, disgorgement of ill-gotten gains, restitution to customers, and civil monetary penalties.
The CFTC alleges that the defendants violated numerous provisions of the CEA and CFTC regulations in the operation of a commodity pool and defrauded at least 34 customers of approximately $1 million.
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