For Release: December 6, 2007
Michigan Federal Court Orders Florida Corporations Millenium Trading Group LLC and Worldwide Clearing LLC, and Florida Resident Cedric Stanton, to Pay More Than $10 Million in Sanctions in CFTC Anti-Fraud Action
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) announced today that the U.S. District Court for the Eastern District of Michigan entered a default judgment order against Millenium Trading Group, LLC (MTG) and Cedric Stanton, both of Miramar, Florida, and Worldwide Clearing, LLC (Worldwide) of Fort Lauderdale, Florida, finding that they committed foreign currency (forex) futures and options fraud and requiring them to pay more than $10 million in restitution and civil monetary penalties
The order requires payment of restitution to defrauded customers in the following amounts: MTG, Stanton, and Worldwide, jointly and severally, $452,516; and MTG and Stanton, jointly and severally, an additional $49,000. The order also requires payment of civil penalties in the following amounts: MTG $3,360,000; Stanton $3,360,000; and Worldwide $3,240,000. Finally, the order permanently bans defendants from trading on markets subject to CFTC jurisdiction or engaging in any conduct requiring CFTC registration.
The order stems from a CFTC complaint filed on April 10, 2007 (see CFTC Press Release, 5319-07, April 19, 2007).
Specifically, the order finds that, between April 2004 and October 2005, MTG’s sales force and Stanton fraudulently solicited members of the general public to open accounts to trade off-exchange forex futures and options by misrepresenting (1) the likelihood that a customer would realize large profits from trading foreign currency futures and options; (2) the risk involved in trading foreign currency futures and options; (3) MTG's poor track record of trading foreign currency futures and options on behalf of customers; and (4) the commissions customers were to be charged.
For example, the order finds that MTG and Stanton represented to a customer that he should expect returns of $100,000 a year on a $6,000 investment; told a customer that a $200,000 investment would generate up to $1 million in a matter of a few weeks; and falsely represented to customers that they could not lose and that their investments were safe, while failing to disclose that between April 2004 and October 2005, most customers sustained losses.
The order further finds that MTG and Stanton accepted at least $49,000 provided by one MTG customer for investment in a forex futures account, but never placed those funds in the account. Rather, MTG and Stanton simply took the money for their own benefit. They told the customer that his trading account had grown from $6,000 to $50,000 when, in fact, no trading account was ever established for the customer. Finally, the order finds that while engaging in its fraudulent solicitation conduct, MTG was acting as an agent of Worldwide and is therefore also liable for MTG’s fraud.
The following CFTC Division of Enforcement staff members are responsible for this case: Ken McCracken, Charles Marvine, Lacey Dingman, Rick Glaser, and Richard Wagner.
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The CFTC encourages members of the public to bring to our attention any suspicious activities involving futures or commodity options, including matters involving foreign currency (forex) investments or suspicious Internet websites.
You may contact the CFTC at 1-866-FON-CFTC (1-866-366-2382), visit us at our Customer Protection web page, or fill out our Internet Report Form identifying your concerns.
In addition, the CFTC publishes a series of Consumer Advisories on its website, which alert the public to warning signs of possible fraudulent activity and offer precautions individuals should take before committing funds
Last Updated: December 6, 2007