For Release: August 9, 2006
U.S. Commodity Futures Trading Commission Charges California Resident Gilbert Philip Castillo, Jr., and His Company, Castle Enterprise Corporation, with Fraud
CFTC Charges that Defendants Fraudulently Solicited Over $800,000 from Customers in Connection with the Trading of S&P 500 Commodity Futures and Option Contracts through Three Internet Websites
Washington, D.C.— The U.S. Commodity Futures Trading Commission (CFTC) announced today the filing of a complaint in the U.S. District Court for the Northern District of California charging that Gilbert Philip Castillo, Jr., and Castle Enterprise Corporation (Castle Enterprise), both of Walnut Creek, California, fraudulently solicited members of the general public while acting as unregistered commodity trading advisors (CTAs) in violation of the Commodity Exchange Act (CEA). The matter has been assigned to the Honorable Judge Thelton E. Henderson, District Court Judge.
The CFTC complaint alleges that, from at least February 1, 1999 through at least mid-2005, Castillo and Castle Enterprise, of which he is the founder and President, fraudulently marketed a number of commodity advisory services related to trading S&P 500 commodity futures and option contracts through three Internet websites: WallStreetWar.com, CastilloResearch.com, and Never-Lose.com.
The CFTC complaint also alleges that Castle Enterprise acted as a CTA without being registered as such with the Commission and that Castillo, as an officer and agent of Castle Enterprise, similarly failed to appropriately register with the CFTC in violation of the CEA.
Specifically, the CFTC complaint alleges that, while soliciting customers and marketing other advisory services, defendants fraudulently misrepresented: 1) Castillo’s trading successes; 2) the accuracy, profitability, and track record of their various commodity advisory services; and 3) the limitation of trading results displayed on the websites that are based on hypothetical or simulated performance. For example, as alleged in the complaint, defendants touted their Wall Street War Advisory Service as “[p]roven to be the most accurate and profitable advisory available,” with a track record of 90 to 96% profitability, with “tremendous returns in different market conditions for 6 years!” that ranged from “302%” to “447%.”
The complaint charges that statements such as these deceived customers, causing them to purchase from defendants trading systems and courses resulting in over $800,000 in fees. Furthermore, the complaint alleges, “in fact, many of the advisory services offered by the defendants to the public never operated, and clients were abandoned after purchasing trading systems or training courses, receiving little or nothing of value and losing their money.”
The complaint seeks injunctive relief against further violations of the Commodity Exchange Act and Commission regulations, disgorgement of ill-gotten gains, restitution to allegedly defrauded customers, civil monetary penalties, and other related relief.
The following CFTC Division of Enforcement staff are responsible for this case: Timothy J. Mulreany, David Reed, Mary Kaminski, Paul Hayeck, and Joan Manley.
Last Updated: July 26, 2007