Release # 4255-99 (99-Civ. 54-V)
For Release: April 16, 1999
NORTH CAROLINA COURT ENTERS DOCUMENTS FREEZE ORDER IN CFTC ACTION CHARGING COMMODITY POOL FRAUD; CFTC CHARGES DONALD TRIVETTE OF NORTH CAROLINA WITH DEFRAUDING INVESTORS BY MISREPRESENTATIONS AND MISAPPROPRIATION OF INVESTOR FUNDS
WASHINGTON — The Commodity Futures Trading Commission (CFTC) announced today that on April 14, 1999, the Honorable Richard L. Voorhees of the U.S. District Court for the Western District of North Carolina entered an ex parte statutory restraining order against Donald Trivette of Union Grove, North Carolina, prohibiting Trivette from destroying or altering any of his business records, and granting CFTC representatives immediate access to Trivette's books and records.
The order arises out of an injunctive complaint filed on April 6, 1999, by the CFTC which alleges that, from at least 1995 to the present, Trivette has violated anti-fraud provisions of the Commodity Exchange Act (CEA) (sSections 4b(a), 4c(b) and 4o(1)) and CFTC regulations (sSection 33.10) by fraudulently soliciting and accepting in excess of $100,000 from investors to participate in a commodity pool or, in the case of one investor, a joint account to trade S&P 500 futures contacts and options on those futures.
Specifically, the complaint alleges that Trivette misrepresented to prospective investors the performance record and size of a pool that he had been trading and later misappropriated at least part of the funds he had solicited by using them for his own trading and personal expenses. The complaint further alleges that Trivette continuously represented to investors that their investments were doing well and earning double-digit returns, when, in fact, both the commodity pool account and Trivette's other trading accounts lost money in 1996, 1997, and 1998.
According to the complaint, when a number of investors recently asked for a return of their investments, Trivette failed to return any of the money. Instead, the complaint alleges that Trivette falsely represented to investors that their monies were seized or frozen by the Chicago Mercantile Exchange, where he had been a registered floor broker from 1993 to 1998.
The complaint also alleges that Trivette commingled investor funds with his own funds, failed to operate the commodity pool as an entity separate from himself, and accepted trading funds in his own name, , all in violation of CFTC regulations.
A hearing is scheduled for April 20, 1999, concerning the CFTC's request for an asset freeze and a temporary restraining order. In its continuing litigation, the CFTC is also seeking preliminary and permanent injunctions and other remedial relief, including restitution to customers and civil monetary penalties.
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