CFTC News Release: 4351-99 (CIV-92-6832)
For Release: December 20, 1999
Florida District Court Orders $2.29 Million in Disgorgement from Marc Stephen Wuensch for Commodity Options Fraud
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that on December 7, 1999, U.S. District Court Judge Ursula Ungaro-Benages of the Southern District of Florida entered a final order of disgorgement of $ 2.29 million 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 registered introducing brokers in Aventura, Florida. As the court previously found, this case involved the fraudulent solicitation of customers to purchase options on commodity futures contracts.
On September 29, 1997, after a 17-day trial, the court found Carrington and Wuensch liable for "systematic and willful" violations of the anti-fraud and supervisory provisions of the Commodity Exchange Act (CEA) in connection with the fraudulent solicitation of customers. 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 also found that associated persons at Carrington fraudulently solicited customers by misrepresenting and omitting material facts concerning, among other things, the profit potential of and risks involved in trading commodity options.
In the September 29, 1997 order, the court also permanently enjoined Wuensch and Carrington from violating the anti-fraud and supervisory provisions of the CEA, and permanently enjoined the remaining defendant, Frank Sidoti, 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 a receiver, among other relief. The court appointed a receiver who seized control of Carrington and terminated its operations. Subsequently, the Commission staff worked with the receiver in the preparation of a report and recommendation for disgorgement to the court.
In the December 7, 1999 order, the court stated that Trinity's and Carrington's business operations under Wuensch's supervision and control were "pervasively fraudulent," and that "Wuensch encouraged, condoned, and participated in pervasive fraud." The court based its $2.29 million order of disgorgement upon Wuensch's undisputed income from Trinity's and Carrington's fraudulent activity during the years 1991 through 1994, the period for which there was record evidence of fraud.
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