Release: #4044-97 (97 Civ. 4793)
For Release: August 28,1997
NEW YORK COURT ISSUES EX PARTE ASSET FREEZE ORDER IN CFTC ENFORCEMENT ACTION AGAINST OSCAR A. KLITIN AND KLITIN ASSOCIATES II, BOTH OF GREAT NECK, NEW YORK
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that the Honorable David Trager of the U.S. District Court for the Eastern District of New York entered an ex parte restraining order against Oscar A. Klitin and Klitin Associates II, both of Great Neck, New York, freezing the defendants' assets and prohibiting them from destroying books and records and from denying CFTC representatives access to such records. Klitin is registered with the CFTC as a commodity pool operator.
The court's action stems from a three-count civil complaint filed on August 25, 1997, alleging that the defendants have been engaged in a fraudulent scheme by misappropriating assets belonging to the participants in a commodity pool Klitin operated and by misrepresenting the pool's financial condition to the investors.
Specifically, the CFTC complaint alleges that Klitin and Klitin Associates:
misappropriated and converted over $200,000 of customer funds;
failed to disclose material business dealings between the pool, Klitin Associates, and Klitin, the pool operator, and distributed misleading account statements to pool participants;
failed to provide pool participants with quarterly account statements; and
failed to distribute the 1996 Annual Report to each participant and to
file a copy with the CFTC.
Hearing Scheduled for September 15th
In its continuing litigation against the defendants, the CFTC is seeking preliminary and permanent injunctions prohibiting Klitin and Klitin Associates II from violating the Commodity Exchange Act (CEA) and CFTC regulations as charged. In addition, the CFTC is seeking, among other sanctions, restitution to customers and civil penalties in an amount of not more than the higher of $110,000 or triple the monetary gain to defendants, whichever is greater, for each violation of the CEA or CFTC regulations.
A hearing on the preliminary injunction is scheduled for September 15, 1997.