Release: 4079-97 (96-CV-10421-BC)
For Release: November 12, 1997
MICHIGAN COURT ISSUES PERMANENT INJUNCTION FINDING THAT
DANIEL M. O'SHAUGHNESSEY DEFRAUDED POOL CUSTOMERS OF OVER
Consent Order Permanently Bars O'Shaughnessey From the Futures Industry and Orders O'Shaughnessey to Pay Restitution to Defrauded Customers
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that the Honorable Robert H. Cleland of the U.S. District Court for the Eastern District of Michigan entered a consent order of permanent injunction against Daniel M. O'Shaughnessey, of Midland, Michigan; Glory Fund I, Inc. (GFI), a Michigan corporation; and Glory Fund, L.L.C. (GFLLC), a Michigan limited liability company, all of whom were charged by the CFTC with defrauding commodity pool customers in an anti-fraud enforcement action filed on November 21, 1996 (CFTC News Release 3970-96, November 26, 1996).
The court's consent order follows a September 25, 1997, order in which Judge Cleland ruled that O'Shaughnessey, GFI, and GFLLC defrauded customers during 1996 in connection with their solicitation and operation of a commodity pool created by O'Shaughnessey and known as the Glory Fund.
In its September 25, 1997, order, the court determined that during the spring of 1996, O'Shaughnessey commenced "a wide-ranging course of fraudulent and illegal conduct" in which he "misappropriated and commingled customer funds, issued monthly statements to pool members that falsely represented increasing account values when his commodity trading was consistently unprofitable, and made misrepresentations and omissions of material fact in soliciting new investors." According to the consent order and the September 25, 1997, order, by mid-November 1996, when the CFTC filed its complaint, O'Shaughnessey had solicited and received $435,886.53 from 26 investors in Michigan and California, but had lost or misappropriated most of those funds. The court found that these actions constituted violations of the Commodity Exchange Act (CEA) and the CFTC's regulations. The court also granted generally the relief sought by the CFTC against the defendants.
In the consent order entered on November 5, 1997, O'Shaughnessey has agreed to be permanently enjoined from committing further violations of federal commodity laws, soliciting or trading commodity futures or options on behalf of others, and acting in any capacity requiring registration under the CEA. The consent order also prohibits O'Shaughnessey from trading for his personal account for a period of 10 years and bars O'Shaughnessey from ever seeking registration with the CFTC in any capacity. In addition, the consent order requires O'Shaughnessey to make full restitution through a payment plan to all investors whose funds the defendants received or disposed of in violation of the CEA and CFTC regulations.
GFI was registered with the CFTC as a commodity pool operator and commodity trading advisor, and O'Shaughnessey was registered as an associated person of GFI. GFLLC was the investment entity used by GFI, and has never been registered with the CFTC in any capacity.