Release: #4236-99 (92-6832-CIV-UUB):
For Release: February 4, 1999
Florida District Court Orders Over $7.96 Million in Disgorgement from
Marc Stephen Wuensch for Commodity Options Fraud
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that on January 22, 1999, U.S. District Court Judge Ursula Ungaro-Benages of the Southern District of Florida entered a final order of disgorgement of $7,961,295 against Marc Stephen Wuensch of Pembroke Pines, Florida, in CFTC v. Trinity Financial Group, Inc. et al. Wuensch was formerly the president of Carrington Financial Corp. Inc. and sales manager of Trinity Financial Group, Inc., both of Aventura, Florida.
Previously, in a September 29, 1997 order, after a 17-day trial, the court found Carrington and Wuensch liable for "systematic and willful" violations of the antifraud and supervisory provisions of the Commodity Exchange Act (CEA) and CFTC regulations. Among other things, the court found that "Carrington and Wuensch failed to establish and maintain meaningful procedures for deterring and detecting fraud by their employees, that Wuensch knew of specific incidents of misconduct and failed to take reasonable steps to correct the problems," and that "the improper sales practices . . . continued since the filing of this action with Wuensch's approval and active participation." The court made detailed findings of numerous instances in which associated persons at Carrington violated the CEA's antifraud provisions by making misrepresentations and/or omitting material facts while soliciting customers to purchase options on commodity futures contracts concerning, among other things, the profit potential of commodity options while minimizing the risks involved. (See CFTC News Release #4061-97, October 2, 1997.)
In the September 29, 1997 order, the court also permanently enjoined Wuensch and Carrington from violating the CEA's antifraud and supervisory provisions, and permanently enjoined the remaining defendant, A. Francis Sidoti of Montauk, New York, from violating the registration provisions of the CEA.
Further, the court ordered defendants to disgorge all profits that Wuensch and Sidoti received from Carrington and Trinity; prohibited the transfer of assets; and ordered Carrington, Wuensch, and Sidoti to transfer all books and records to an equity receiver, among other relief. The court appointed Frank P. Scruggs, Esq. of the law firm of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A. as equity receiver (Tel:  765-0500). Immediately after his appointment, the receiver seized control of Carrington and terminated its operations. Subsequently, Commission staff worked with the receiver in the preparation of a report and recommendation for disgorgement to the court.
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In its January 22, 1999, order, the court stated that the Commission had proven "systematic and pervasive fraudulent conduct" and noted that "Wuensch encouraged, condoned, and participated in a pervasive fraud." The court adopted, in part, the receiver's Report and Recommendation, and ordered Wuensch to disgorge $7,961,295, which represents the income he received from Trinity and Carrington from 1991 through September 1997. The court further ordered Wuensch to post a surety bond for the entire amount of the disgorgement ordered, and required him to make a complete and accurate asset disclosure to the receiver within 20 days.
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