Release: #4065-97 (95-Civ-6970)
For Release: October 21, 1997
U.S. DISTRICT COURT GRANTS SUMMARY JUDGMENT TO CFTC IN FRAUD ACTION
AGAINST RICHARD E. MASERI OF BOCA RATON, FLA., AND PRIVATE RESEARCH,
Maseri Found to Have Defrauded Customers of Over $550,000 In Scheme
Involving Computer Software Trading Program; Contempt Hearing To Be
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that on October 14, 1997, the U.S. District Court for the Southern District of Florida granted the CFTC's motion for summary judgment against Richard E. Maseri of Boca Raton, Florida and Private Research, Inc. (Private Research), a Florida corporation, ruling that the CFTC is entitled to the permanent injunction it sought in its complaint filed October 16, 1995. (CFTC News Release #3877-95, November 3, 1995.)
Chief Judge Edward B. Davis also granted the CFTC's motion for default judgment against Florida corporations AIM International, Inc. (AIM) and Bullseye, Inc. (Bullseye), that, along with Maseri, were charged in the same complaint with cheating and defrauding customers, registration, and disclosure violations.
Judge Davis held that Maseri, AIM, and Bullseye defrauded customers during 1994 in connection with selling a commodity software trading advice program known as the "CAT-FX program" that was developed, owned and marketed by Maseri. The court determined that Maseri, AIM and Bullseye made "duplicitous" claims about the CAT-FX's trading success in order to promote the fraudulent trading program. Judge Davis also found that Maseri himself misled customers by highlighting his experience at major brokerage firms while failing to disclose that he had been discharged for cause from those firms. The court also found that Maseri failed to disclose that he had been barred from the securities industry after a decision of the National Association of Securities Dealers found that he converted customer funds to his own use.
The court further found that Maseri failed to register with the CFTC as a commodity trading advisor, futures commission merchant and commodity pool operator or to provide customers with disclosure documents as required under the CEA.
Judge Davis ordered a hearing to be held on November 12, 1997, in Miami to determine whether Maseri should be held in contempt for transferring assets in violation of the order of preliminary injunction entered on October 25, 1995. At the same time, the court will also hold a hearing to determine whether Ronald Bruce Romberg, of Lighthouse Point, Florida, who was charged in the complaint, should be held in contempt for failing to obey the court's order to appear and give testimony in this case.
The CFTC Enforcement Division anticipates that the court will issue a
final judgment and order that will permanently enjoin Maseri and the other
defendants from engaging in the violations charged in the complaint, and
may afford other relief, including disgorgement and restitution.
Geoffrey Aronow, the CFTC's Director of Enforcement, stated:
"We are gratified by the court's strong action in this matter and the deterrent message it sends to those who would defraud the public by making false claims in connection with transactions involving use of commodity trading software. We continue to be concerned about activity in this area and will continue our efforts to combat fraud in connection with futures and options trading systems."