For Release: December 20, 2006
U.S. Commodity Futures Trading Commission Seeks to Revoke Registrations of Worldwide Commodity Corporation and South Coast Commodities, Inc.
Washington, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today that on December 7, 2006, it filed Notices of Intent to Revoke Registration (Notices) against Worldwide Commodity Corporation and its successor corporation South Coast Commodities, Inc., both of Pembroke Pines, Florida. Accordingly, the CFTC has ordered that a public hearing be held to determine whether Worldwide’s and South Coast’s registration should be revoked.
The Notices allege that, pursuant to the Commodity Exchange Act (CEA), Worldwide and South Coast are subject to statutory disqualification of their registrations as Introducing Brokers based on the entry of a consent order of permanent injunction against them in the U.S. District Court for the Southern District of Florida on September 19, 2006. The consent order resolved charges against Worldwide and South Coast and other defendants arising from the CFTC’s August 2004 complaint and October 2005 amended complaint in Commodity Futures Trading Commission v. Worldwide Commodities Corp., et al., (see CFTC Press Release 4971-04, August 13, 2004).
The CFTC’s amended complaint alleged that Worldwide and others fraudulently solicited members of the public to open accounts to trade options on commodity futures contracts (options) by misrepresenting and failing to disclose material facts concerning, among other things, 1) the likelihood that a customer would realize large profits from trading options; 2) the risk involved in trading options; and 3) the dismal performance record of UIG customers trading options.
The amended complaint further alleged that, as a successor corporation to Worldwide, South Coast was liable for the fraudulent acts, misrepresentations, and omissions of Worldwide’s employees, which occurred within the scope of their employment with Worldwide.
The consent order found, among other things, that Worldwide and South Coast violated certain options anti-fraud provisions of the CEA and CFTC regulations, and required them to pay more than $5 million in restitution to their defrauded customers and pay $3.5 million each in civil monetary penalties.
The following CFTC Division of Enforcement staff members are responsible for this case: Richard Glaser, Kenneth McCracken, Jeff Le Riche, Jo Mettenburg, and Lacey Dingman.
Last Updated: April 22, 2010