For Release: September 14, 2006
U.S. Commodity Futures Trading Commission Settles Foreign Currency (Forex) Fraud Action Resulting in Over $2.5 Million in Civil Penalties
Mercury Partners, Inc., Mercury Financial Partners, Inc., Mercury Management, L.C. and Others Liable for Fraud & Misappropriation
Washington, D.C.— The U.S. Commodity Futures Trading Commission (CFTC) announced today that the Honorable Cecelia Altonaga of the U.S. District Court for the Southern District of Florida entered consent orders of permanent injunction against Mercury Management, L.C. of Lake Worth, Florida; its manager, Michael Morgan of West Palm Beach, Florida; Andrew Bartos of Houston, Texas; and Bruce N. Crown currently incarcerated in Jessup, Georgia. The permanent injunctions require the defendants to, among other things, pay restitution to defrauded customers.
The litigation stems from a CFTC enforcement action filed on March 7, 2005, charging defendants Mercury Management, Morgan, Bartos, Crown, Mercury Partners, Inc., and Mercury Financial Partners, Inc. with fraudulent solicitation and misappropriation of customer funds in violation of the Commodity Exchange Act (CEA) and CFTC regulations. (See CFTC News Release 5055-05, March 15, 2005.)
Default Judgments Entered Against Related Entities Mercury Partners, Inc. and Mercury Financial Partners, Inc. Imposing Over $2 Million in Penalties
The consent orders follow default judgments previously entered against Mercury Partners, Inc., a Bahamian corporation with an office in Boca Raton, Florida, and Mercury Financial Partners, Inc of Pompano Beach, Florida. The judgments permanently bar the companies from engaging in, among other things, any commodity-related activity, and hold them jointly and severally liable for $148,756 in restitution. Mercury Partners and Mercury Financial Partners were each ordered to pay civil monetary penalties of $1,080,000 for violations of the anti-fraud provisions of the CEA and CFTC regulations.
Consent Orders against Mercury Management, Crown, Bartos, and Morgan Impose over $500,000 in Civil Penalties; Arise from CFTC Enforcement Action Filed in 2005
According to the consent orders, from at least August through approximately November 2004, Mercury Partners and its employees including Crown, enticed customers to send the firm money by making material misrepresentations regarding the profit potential and risk associated with trading foreign currency (forex) contracts. Rather than purchase forex contracts, Mercury Partners forwarded customer funds to Mercury Management and Mercury Financial Partners. The principals of those entities – Michael Morgan and Andrew Bartos, respectively – used the funds for personal expenses.
In addition to restitution, the consent orders permanently bar Mercury Management, Morgan, Bartos, and Crown from any commodity-related activity and impose civil monetary penalties totaling more than $508,000 for violations of the anti-fraud provisions of the CEA and CFTC regulations.
For a separate, but connected transaction, Crown was ordered to pay an additional $50,000 in restitution to a customer he fraudulently solicited under the guise of purchasing exchange-traded crude oil options. Crown claimed the options were held in a commodity trading account at a large, well-known brokerage firm; however, no such commodity trading account existed. Instead, Crown deposited the money in his personal bank account and withdrew the money as cash.
The following CFTC Division of Enforcement staffers were responsible for this case: William L. Small, Lacey Dingman, Jan M. Folena, Richard Glaser, and Richard Wagner.
Last Updated: April 22, 2010