For Release: October 18, 2006
U.S. Commodity Futures Trading Commission Obtains Permanent Injunction Against Muskegon Heights, Michigan Man Charged with Defrauding Managed Account Clients
Steven G. Schroeder Permanently Restrained from Engaging in Commodity Futures Trading
Washington, D.C.— The U.S. Commodity Futures Trading Commission (CFTC) announced today that Judge Gordon J. Quist of the U.S. District Court in Grand Rapids, Michigan, entered a consent order of permanent injunction against Muskegon Heights, Michigan, resident Steven G. Schroeder, permanently barring him from engaging in any commodity futures trading activity for himself or others.
In addition, the order, which stems from a CFTC complaint filed on September 27, 2006 (see CFTC News Release 5238-06, October 4, 2006), continues a freeze order on Schroeder’s assets and continues to prohibit him from destroying, altering, or disposing of his books and records.
The order, entered on October 6, 2006, just ten days after the case was filed, also made specific findings of fact, including that Schroeder had made material misrepresentations to prospective managed account clients, including false statements about the size of his personal trading accounts, the profitability of his past trading for himself and his clients, and his educational background.
Specifically, the order finds that Schroeder sent prospective clients a fabricated account statement showing an alleged $1 million balance in his personal account and e-mails including a phony personal commodity trading track record showing $730,000 in profits. Furthermore, the order finds that Schroeder fraudulently solicited approximately $2.057 million from at least eleven members of the general public.
At the time of the filing of the lawsuit against Schroeder on September 27, 2006, Schroeder continued to manage more than $225,000 for one client. However, Schroeder’s authority to trade on behalf of that client has since been revoked.
Restitution and Civil Penalty Amounts to be Determined
The CFTC will engage in additional discovery in order to confirm the restitution amount owed to defrauded investors. A separate court order specifying the amount of restitution, disgorgement, and civil monetary penalties to be paid by Schroeder is reserved for further proceedings before the court, which retained jurisdiction over the action.
The following CFTC staff members are responsible for this case: Susan B. Padove, Robert J. Greenwald, William W. Heitner, Jr., Scott R. Williamson, Rosemary Hollinger, and Richard Wagner.
Last Updated: August 4, 2007