Release #4221-98 (Civ 98-2575-CWT 26C)
For Release: December 23, 1998
FLORIDA COURT ISSUES ASSET FREEZE AND APPOINTS RECEIVER IN CFTC ACTION CHARGING FRAUDULENT COMMODITY POOL; CFTC CHARGES MICHAEL COLTON AND FUTURE-COMM TRADING WITH DEFRAUDING CUSTOMERS THROUGH PERSONAL SOLICITATIONS AND AN INTERNET SITE
WASHINGTON — The Commodity Futures Trading Commission (CFTC) announced today that the Honorable Richard A. Lazzara of the U.S. District Court for the Middle District of Florida issued an ex parte order against Michael Colton of Dunedin, Florida, individually and doing business as Future-Comm Trading (Future-Comm), which freezes Colton's assets, appoints a receiver to take charge of the business operations and marshal assets for potential redress to injured customers, and grants CFTC representatives immediate access to books and records. Neither Colton nor Future-Comm is registered with the Commission in any capacity.
The CFTC's complaint alleges that, from January 1997 to the present, the defendants have violated anti-fraud provisions of the Commodity Exchange Act (CEA) (sections 4b(a) and 4o(1)) by fraudulently soliciting at least $650,000 from members of the public to invest in the Future-Comm commodity pool.
According to the complaint, through an Internet site (www.futurecommtrading.net), brochures, and in-person sales presentations, Colton enticed prospective investors by claiming that the Future-Comm pool has generated substantial profits, such as a 495 percent or 660 percent return in 1997, and that such returns are accomplished with low risk. The complaint alleges that, in reality, the Future-Comm pool suffered considerable losses due to Colton's placement of losing trades on futures and options contracts and his routine misappropriation of pool funds.
The complaint also charges that Colton violated other provisions of the CEA and CFTC regulations by falsely representing that Future-Comm is a commodity pool operator registered with the CFTC (section 4h of the CEA); acting as an unregistered commodity pool operator and commodity trading advisor (section 4m of the CEA); and mishandling customer funds by, among other things, accepting and trading funds in his own name and commingling property of the pool with his own property or the property of others (CFTC regulations 4.20 and 4.30).
In its continuing litigation, the CFTC is seeking preliminary and permanent civil injunctions in addition to other remedial relief including restitution to customers.
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