Release: 4197-98 (Civ-97-01478-ACK)

For Release: October 20, 1998

 

HAWAII COURT FINDS THAT BRIEN SULLIVAN, A DEFENDANT IN A 1997 CFTC ENFORCEMENT ACTION, DEFRAUDED CUSTOMERS IN CONNECTION WITH MANAGED ACCOUNTS AND A COMMODITY POOL HE CONTROLLED

Court Orders Sullivan to Pay a $100,000 Civil Monetary Penalty and

to Make Restitution of $317,193.84 to Defrauded Customers

WASHINGTON- The Commodity Futures Trading Commission (CFTC) announced today that on September 28, 1998, the Honorable Judge Allan Kay of the U.S. District Court, Hawaii District, granted the CFTC's motion for summary judgment against Brien Sullivan of Honolulu, Hawaii, doing business as Brien Sullivan Capital Management and as Lava Trading. Sullivan has never been registered with the CFTC.

The court's action stems from a five-count CFTC complaint filed on October 23, 1997, alleging that since January 1994, Sullivan engaged in a fraudulent scheme whereby he defrauded commodity pool investors in violation of the Commodity Exchange Act (CEA) and CFTC regulations (see CFTC News Release 4067-97, October 23, 1997).

Sullivan Violated Federal Commodity Law by Engaging in Fraudulent Scheme, Court Finds

In his decision, Judge Kay found that Sullivan violated the CEA and CFTC's regulations by defrauding investors in individual accounts that he managed and in a commodity pool that he controlled. Specifically, the court found that Sullivan fraudulently induced customers to trade in commodity options, by falsely claiming he was a successful trader and that there was minimal risk in futures trading. The court also found that Sullivan failed to disclose that he was siphoning off investors' funds for his own benefit and knowingly sent out false account statements.

In granting the CFTC's motion, the court issued an order permanently enjoining Sullivan from violating the CEA and CFTC regulations, imposing civil penalties amounting to $100,000, and requiring restitution to customers of $317,193.84.

 

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