September 30, 2014
CFTC Charges Florida Company International Monetary Metals, Inc. and Florida Resident Martin Sommers with Engaging in Illegal, Off-Exchange Precious Metals Transactions
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that it filed a civil enforcement Complaint in the U.S. District Court for the Southern District of Florida against Defendants International Monetary Metals, Inc. (IMM) of Hollywood, Florida, and its president Martin Sommers of Cooper City, Florida. The CFTC Complaint charges the Defendants with engaging in illegal, off-exchange transactions in precious metals with retail customers on a leveraged, margined, or financed basis. The Complaint further alleges that Sommers, as controlling person for IMM, is liable for IMM’s violations of the Commodity Exchange Act (CEA).
According to the Complaint, since at least July 16, 2011 to March 2013, IMM, by and through its employees, agents, or officers, including Sommers, solicited retail customers by telephone and on IMM’s websites to engage in leveraged, margined, or financed precious metals (including gold, silver, and platinum) transactions. During that period, the Complaint alleges, IMM solicited and accepted a total of at least $6 million from about 240 retail customers for precious metals transactions. The Complaint further alleges that in connection with such transactions, IMM received commissions and fees totaling more than $827,000. In addition, the Complaint alleges that IMM accepted customer orders and funds and thus acted as a Futures Commission Merchant without registering with the CFTC as such.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, leveraged, margined, or financed transactions such as those conducted by IMM, are illegal off-exchange transactions unless they result in actual delivery of metals. The Complaint alleges that metals were never actually delivered to IMM’s customers in connection with IMM’s leveraged, margined, or financed precious metals transactions. The Complaint further alleges that IMM conducted the illegal precious metals transactions through Worth Group, Inc. (Worth) and AmeriFirst Management, LLC (AmeriFirst).
The CFTC sued Worth in the U.S. District Court for the Southern District of Florida in August 2013 (see CFTC Press Release 6666-13), charging Worth with engaging in illegal, off-exchange precious metals transactions and other violations. On January 23, 2014, the District Court entered a Consent Order of Preliminary Injunction enjoining Worth from violating Sections 6(c)(1), 4(a), 4b(a)(1)(A) and (C) of the Act, 7 U.S.C. §§9(1), 6(a), 6b(a)(1)(A) and (C) (2012), and CFTC Regulation 180.1, 17 C.F.R. §180.1 (2013). On July 30, 2013, the CFTC sued AmeriFirst in the U.S. District Court for the Southern District of Florida, charging AmeriFirst with engaging in illegal, off-exchange precious metals transactions, fraud, and other violations (see CFTC Press Release 6655-13). On July 24, 2014, the District Court entered a supplemental consent Order against AmeriFirst and the three individual Defendants in that case requiring them to pay more than $25 million in restitution and $10 million in civil monetary penalties (see CFTC Press Release 6973-14).
In its continuing litigation against IMM and Sommers, the CFTC seeks disgorgement of ill-gotten gains, restitution for the benefit of customers, civil monetary penalties, permanent registration and trading bans, and a permanent injunction from future violations of the CEA, as charged.
CFTC Division of Enforcement staff members responsible for this action are Linda Y. Peng, David W. MacGregor, Lenel Hickson, Jr., and Manal M. Sultan.
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CFTC’s Precious Metals Customer Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Precious Metals Fraud Advisory, which alerts customers to precious metals fraud and lists simple ways to spot precious metals scams.
Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.
Last Updated: September 30, 2014