Release : #4139-98 (CFTC Docket No. 98-13)

For Release: April 28, 1998

CFTC FILES ENFORCEMENT ACTION AGAINST

TODD ALAN THOMAS OF FLORIDA ALLEGING FRAUD

IN SOLICITING COMMODITY OPTION CUSTOMERS

Respondent Charged with Fraud by Misrepresentation and Omission of Material Facts in Connection with the Solicitation and Maintenance of Commodity Option Transactions

WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that on April 27, 1998, it filed a one-count administrative complaint alleging that Todd Alan Thomas of Boca Raton, Florida violated the anti-fraud provisions of the Commodity Exchange Act and CFTC regulations by fraudulently soliciting customers to purchase commodity options.

The CFTC complaint alleges that Thomas made false, deceptive, and misleading statements in radio and television infomercials and in telephone solicitations of customers to purchase commodity options.

More specifically, the CFTC complaint alleges that Thomas fraudulently misrepresented that customers who purchase options on futures contracts will profit from seasonal and other existing and known supply and demand forces that affect the prices of certain commodities in the cash market. The complaint further alleges that Thomas made fraudulent misrepresentations, and omitted to disclose material facts, such that he:

exaggerated the likelihood of profit from trading commodity options;

minimized the risk of loss involved in trading commodity options; and

overstated Thomas' performance record in trading commodity options.

The complaint alleges that at least 90 percent of the accounts opened by Thomas since late 1992 lost money. The complaint further alleges that losses in Thomas' unprofitable accounts totaled approximately $1.3 million, while Thomas received at least $871,000 in commissions.

The CFTC's complaint initiates a public administrative proceeding to determine if the allegations in the complaint are true and, if so, what sanctions should be imposed.