Release: 4103-98 (Civ-97-C7061)
For Release: February 9, 1998
CFTC FILES AMENDED COMPLAINT IN CFTC v. FTI
FINANCIAL GROUP CHARGING FOUR ADDITIONAL DEFENDANTS IN OHIO WITH FRAUD,
AMONG OTHER VIOLATIONS OF FEDERAL COMMODITY LAW
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today the filing of an amended complaint naming James R. Crawford and Randall Williams, both of Toledo, Ohio, and Terry G. Wigton of Cuyahoga Falls, Ohio, and Anthony L. Holt of Blountville, Tennessee, as additional defendants in a civil anti-fraud action pending before U.S. District Judge Harry D. Leinenweber in Chicago, Illinois.
The pending action initially charged FTI Financial Group, Samuel H. Foreman, Mark G. Stevens and Carolyn F. Munn with violating the antifraud and other provisions of the Commodity Exchange Act (CEA) (see CFTC News Release 4063-97, October 10, 1997).
The CFTC's amended complaint filed on January 28, 1998, alleges that Crawford, Williams, Wigton and Holt defrauded commodity pool investors by misrepresenting the risk of trading futures, failing to disclose trading losses, and issuing false reports, among other things, in violation of the anti-fraud provisions of the CEA. The amended complaint further alleges that the defendants acted as commodity pool operators or commodity trading advisors, or solicited investors for commodity pools and discretionary accounts, without registering with the CFTC as required by the CEA, and that Holt filed a false statement with the CFTC claiming that he was exempt from registration.
According to the CFTC's amended complaint, Crawford, Wigton, Williams, and Holt solicited general partners and investors to form commodity pools in Ohio, Tennessee, and Virginia under a "multi-level" compensation plan. The amended complaint alleges that Crawford, Wigton, and Williams misrepresented the risks of commodity interest trading intending that the general partners of the commodity pools, including Holt, Foreman, Stevens and Munn, would repeat the misrepresentations to pool investors. However, Holt and the FTI general partners themselves allegedly defrauded investors by, among other things, failing to disclose unrealized trading losses in the pools that they operated. The amended complaint also alleges that Holt fraudulently solicited investors to move their investments from the commodity pools to bank debentures.
The CFTC's action amended a complaint initially filed on October 9, 1997, alleging, among other things, that FTI Financial Group (of Toledo, Ohio), an Ohio general partnership, and its three general partners, Foreman (of Maumee, Ohio), Stevens (of Grand Rapids, Ohio), and Munn (of Swanton, Ohio) -- none of whom has ever been registered with the CFTC -- defrauded commodity pool investors by misrepresenting risk, failing to disclose losses, misappropriating investors' money and issuing false reports, in violation of the CEA.
The court entered a consent preliminary injunction on October 9, 1997, which froze the assets of FTI, Foreman, Stevens, and Munn, required them to distribute more than $271,400 to investors immediately, and barred them from the futures industry until further order of the court. FTI and its general partners agreed to the court order without admitting or denying the allegations. The initial complaint alleged that Crawford and Williams solicited the FTI general partners to form three pools and directed the trading for the pools.
Altogether, as a result of the alleged activities of all the defendants, at least 70 investors invested more than $2 million in eleven commodity pools.
The amended complaint seeks a permanent injunction, restitution, disgorgement, civil monetary penalties and other equitable relief against each of the defendants.