Release: #4086-97 (C2-94-981)
For Release: December 11, 1997
OHIO COURT PERMANENTLY BARS ALLIED FINANCIAL GROUP, INC. (AFG) OF POWELL, OHIO, AND ROBERT BOBO FROM THE FUTURES INDUSTRY; AFG AND BOBO AGREE TO PAY RESTITUTION TO DEFRAUDED INVESTORS
Court Order Stems from a Six-Count Anti-Fraud Enforcement Action Brought Against
the Defendants in 1994 by the CFTC and the State of Ohio
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that on November 19, 1997, the Honorable John Holschuh Sr., U.S. District Court Judge for the Southern District of Ohio, entered a consent permanent injunction order, which, among other things, bars Allied Financial Group, Inc. (AFG) located in Powell, Ohio, and Robert Bobo of Worthington, Ohio from the U.S. futures markets and the securities industry in the State of Ohio and orders them to pay restitution to defrauded investors.
The order was entered to settle a six-count injunctive complaint filed by the CFTC and the Ohio Division of Securities, a co-plaintiff with the CFTC in the action, on October 11, 1994, against AFG, Bobo, and Jeffrey A. Smith of Westerville, Ohio, in the U.S. District Court, charging that the defendants' activities, among other things, defrauded commodity investors in violation of the anti-fraud provisions of the Commodity Exchange Act (See CFTC News Release #3793-94, October 14, 1994). AFG was alleged to be a commodity pool operator controlled by Bobo and Smith.
The complaint charged that from February 1993 through October 1994 the defendants cheated and defrauded commodity pool investors and that they solicited $844,093 from approximately 60 Ohio residents by falsely representing to investors and potential investors that they were operating a highly profitable commodity futures pool. The complaint also alleged that defendants misappropriated most of the money for their own use, invested only a small portion of the funds in commodity futures, and issued false reports and monthly statements to investors showing increasing profits from commodity trading when, in fact, no trading was occurring.
Under the terms of the consent order, defendants AFG and Bobo have agreed to be permanently enjoined from committing further violations of federal commodity law and to make immediate restitution in the amount of $150,336 for the benefit of customers to a court-appointed administrator. Finally, the consent order prohibits the defendants from ever seeking registration with the CFTC in any capacity.
Settlement Order with Smith is Pending Before the Court
The parties have also presented a separate consent order of permanent injunction against defendant Jeffrey A. Smith to Judge Holschuh. This order, which is pending before the Judge, would enjoin Smith from participating in the U.S. futures markets and the securities industry in the state of Ohio and require Smith to disgorge his ill-gotten financial gains from his participation in AFG's activities.