Release: 4328-99 (96-Civ-2640)
For Release: October 25, 1999
COURT ORDERS AYM FINANCIAL CORPORATION AND ITS TWO PRINCIPALS, THOMAS M. PALEY AND ADAM S. JUECHTER, TO PAY RESTITUTION AND DISGORGEMENT TO SETTLE SUIT CHARGING FRAUDULENT SALE OF FOREIGN CURRENCY FUTURES CONTRACTS
Permanent Injunction Also Ordered Against Third Defendant, Marc Kronish
WASHINGTON — The Commodity Futures Trading Commission (CFTC) announced today that the Honorable Herbert J. Hutton of the U.S. District Court for the Eastern District of Pennsylvania entered a consent order requiring AYM Financial Corporation (AYM) of Princeton, New Jersey, and its two principals, Thomas M. Paley of Warren, N.J., and Adam S. Juechter of Bridgewater, N.J., to pay $77,618 to investors in a foreign currency scheme.
The court also entered a consent order permanently enjoining Marc Kronish of Philadelphia, Pennsylvania, an employee of AYM, from, among other things, violating antifraud and registration provisions of the Commodity Exchange Act (CEA), and from violating the CEA's prohibition on the sale of futures contracts that are not transacted on or subject to the rules of a contract market designated by the CFTC.
The court's orders, entered on October 20, 1999, stem from an eleven-count civil injunctive action filed jointly by the CFTC and the Arizona Corporation Commission (see CFTC News Release 3898-96, April 2, 1996). The complaint alleged that, from at least March 1994 to February 20, 1996, the defendants cheated and defrauded customers, offered and sold illegal futures contracts on foreign currencies, converted customer funds, and bucketed customer orders. According to the complaint, through newspapers advertisements and mail solicitations, defendants touted extraordinary profits that investors were likely to achieve by trading foreign currency futures contracts through AYM offices in Philadelphia, Phoenix, and Houston. The defendants urged investors to open trading accounts in their own names and recruit family members and friends to open accounts with AYM. The complaint charged that instead of using all of the customer money to buy futures contracts in foreign currencies, defendants siphoned off funds to pay personal expenses, operating expenses, and salaries and commissions.
The consent order against AYM, Paley, and Juechter requires them, jointly and severally, to disgorge and make restitution in the amount of $3 million to investors in AYM foreign currency trading accounts. However, based upon their financial circumstances, the court waived all but $77,618 of that amount. AYM, Paley, and Juechter had previously consented to permanent injunctions, prohibiting them from engaging in any business relating to the offer and sale of commodities and from violating the provisions of the CEA and Arizona law charged in the complaint. The permanent injunction issued against Kronish also orders him to pay restitution in the amount of $3 million, jointly and severally with the other defendants, but waives payment of that amount based on his financial circumstances.