For Release: May 3, 2007
California Federal Court Enters Order Granting Judgment against White Pine Trust Corporation and California Resident Stephan Baere in Foreign Currency (Forex) Fraud Action
Defendants Ordered to Pay More than $30 Million in Action Brought by U.S. Commodity Futures Trading Commission; Sanctions Ordered by the Court Total More than $59 Million
Washington, D.C. — The U.S. Commodity Futures Trading Commission (CFTC) announced today that the Honorable Napoleon Jones of the U.S. District Court for the Southern District of California entered separate contemporaneous orders against California resident Stephan Baere and White Pine Trust Corporation (WPT), a San Diego-based foreign currency (forex) trading firm for which Baere was identified as the Director of Business Development or Director of Client Development.
The court granted the CFTC’s order for summary judgment and ordered Baere to disgorge $600,000 in profits and to pay $100,000 in civil monetary penalties based on findings that he committed fraud in connection with the offering of options through WPT. The court order stated that the $600,000 disgorgement amount will be reduced by any amounts recovered in a criminal action against Baere (05CR0874-JM), as well as by amounts recovered by other legal proceedings.
Furthermore, the order finds that Baere fraudulently solicited customers using misleading statements regarding WPT’s track record, longevity, and experience. Baere also utilized fictitious testimonials concerning the success of WPT to gain the trust of prospective customers. Baere admitted that he knowingly and intentionally represented to investors that “Tom Clausen” was a client of one of WPT’s funds who would act as a reference to potential investors – when, in fact, Baere knew that “Tom Clausen” was a fictitious person devised to provide a fictitious positive reference to potential investors
The court’s order entering default judgment against WPT found the corporation liable for fraud and vicariously liable for the conduct of Richard Matthews, Founder and Managing Director of WPT. The court imposed a $14.8 million civil monetary penalty against WPT and ordered it to pay $14.8 million in restitution.
In November 2006, Judge Jones ordered Matthews to pay more than $29 million in civil penalties and restitution for his role in the fraud (see CFTC News Release 5261-06, December 4, 2006). All three orders arose out of a complaint filed on October 20, 2004, and amended November 19, 2004 (see CFTC News Release 5016-04, November 2, 2004).
The CFTC would like to thank the U.S. Attorney’s Office, as well as the San Diego Offices of the Federal Bureau of Investigation and the Department of Homeland Security, Bureau of Immigration, Customs Enforcement for their assistance and cooperation in this action.
The following CFTC Division of Enforcement staff were responsible for this action: James H. Holl, III and Gretchen L. Lowe.
Last Updated: May 8, 2007