For Release: April 8, 1998
CFTC FILES CIVIL ANTI-FRAUD AND REGISTRATION CHARGES IN VERMONT
FEDERAL DISTRICT COURT AGAINST THOMAS B. O'CONNELL
IN CONNECTION WITH THE SALE OF COMMODITY FUTURES
TO THE PUBLIC
The Commodity Futures Trading Commission (CFTC) announced today that on
April 8, 1998, it filed an injunctive action in the U.S. District Court for
the District of Vermont against Thomas B. O'Connell
(O'Connell), alleging that O'Connell operated a multi-million
dollar commodity pool Ponzi scheme in violation of the Commodity Exchange
Act (the Act) and CFTC regulations (Regulations). Simultaneous with the
filing, O'Connell consented to the entry of a permanent injunction and
The eight count complaint alleges that between 1989 and 1995, O'Connell defrauded investors in two limited partnerships he operated, O'Connell and Associates (OCA), a Vermont limited partnership, and O'Connell Partnership Limited (OPL), a Florida limited partnership. The complaint alleges that during that period, O'Connell defrauded more than 50 investing limited partners out of funds in excess of $14 million. According to the complaint, O'Connell perpetuated his scheme by mailing false monthly reports to investors. In addition, O'Connell allegedly created a fictitious futures commission merchant to help him conceal his fraud, theft and actual trading losses from auditors. Among other things, the complaint alleges, O'Connell misappropriated investors' funds to pay personal living expenses, to purchase luxury homes and to purchase private aircraft. The complaint also alleges that O'Connell violated the registration provisions of the Act by operating an unregistered commodity pool and violated CFTC regulations by commingling funds of the pool with his own funds and failing to make proper disclosures to the pool participants.
O'Connell consented to the entry of a permanent injunction prohibiting him from engaging in further violations of the Act and Regulations and from engaging in any commodity-related activity, including soliciting customers or customer funds or trading for himself or on behalf of other persons. The CFTC has filed O'Connell's signed consent to permanent injunction with the court where it now awaits formal entry. O'Connell is currently serving a 52 month prison sentence for conviction on federal criminal charges stemming from his activities as sole general and managing partner of OCA and OPL.
The U.S. Attorney's Office for the District of Vermont, the Federal Bureau of Investigation and the Securities and Exchange Commission provided valuable assistance to the CFTC in the investigation of this matter. Also today, the CFTC instituted administrative proceedings alleging improper professional conduct against Henry & Horne, PLC, the public accounting firm that audited OCA's financial statements from 1992 through 1995, and two of its accountants, Sherald Griffin and Donna Laubscher, and accepted offers of settlement from Griffin and Laubscher.