Release Number 7201-15
July 22, 2015
Federal Court Orders Florida Attorney Jay Bruce Grossman to Pay a Civil Penalty and Restitution Totaling $883,000
Grossman Agrees Not to Appear or Practice as an Attorney before the CFTC
Washington, DC — The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge Beth Bloom of the U.S. District Court for the Southern District of Florida entered a Consent Order against Defendant Jay Bruce Grossman, who practices law in Fort Lauderdale, Florida.
The Consent Order requires Grossman to pay a $150,000 civil monetary penalty and restitution of $733,000 in connection with Grossman’s aiding and abetting multiple clients in their operation of illegal and fraudulent precious metals schemes in violation of the Commodity Exchange Act (CEA) The Order also permanently enjoins Grossman from committing further violations of the CEA, as charged, and requires Grossman not to appear or practice as an attorney before the CFTC until such time as he has been reinstated by Order of the CFTC.
The Order arises out of the CFTC Complaint filed on September 9, 2014 (see CFTC Complaint and Press Release 6990-14). According to the CFTC Complaint, Grossman, in his capacity as an attorney, aided and abetted multiple clients in their operation of unlawful precious metals schemes by crafting the illusion that their schemes were legitimate and complied with the law, when in fact they were neither.
The CFTC previously obtained the following judgments against Grossman’s clients:
• On May 16, 2014, a federal court in Florida found that Grossman client Hunter Wise and its owners committed “repeated, callous, and blatant” fraud in their operation of a precious metals scheme and ordered Hunter Wise and its owners to pay $52.6 million in restitution to defrauded customers and a $55.4 million civil monetary penalty in U.S. Commodity Futures Trading Commission v. Hunter Wise Commodities, LLC, Case No. 9:12-cv-81311-DMM (S.D. Fla.) (see CFTC Press Release 6935-14, May 22, 2014).
• On July 24, 2014, a federal court in Florida ordered Grossman client AmeriFirst Management and its owners to pay $25 million in restitution and a $10 million civil monetary penalty for their operation of a fraudulent precious metals scheme in U.S. Commodity Futures Trading Commission v. AmeriFirst Management LLC. Case No. 0:13-cv-61637-WPD (S.D. Fla.) (see CFTC Press Release 6973-14).
• In the same action, the court also ordered Grossman clients James Burbage and Frank Gaudino, and their companies Lloyds Commodities, LLC, Lloyds Commodities Credit Company, LLC, and Lloyds Services, LLC, to pay restitution totaling over $2 million and civil monetary penalties totaling over $2.9 million for engaging in unlawful retail off-exchange precious metals transactions (see CFTC Press Release 6850-14).
• Additionally, the CFTC filed and settled charges with two Grossman clients, Secured Precious Metals and Joseph Glenn Commodities, for engaging in unlawful retail off-exchange precious metals transactions while acting as metals dealers for Hunter Wise (see CFTC Press Releases 6503-13 and 6542-13).
The CFTC cautions victims that restitution orders may not result in the recovery of money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure that wrongdoers are held accountable.
CFTC Division of Enforcement staff members responsible for this case are Stephanie Reinhart, Jennifer E. Smiley, Susan Gradman, Scott Williamson, and Rosemary Hollinger.
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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: July 22, 2015