For Release: February 7, 2008
New Jersey Federal Court Orders More Than $8 Million in Sanctions Against Robert W. Shimer, Vincent J. Firth, and Equity Financial Group LLC in CFTC Anti-Fraud Action
Judgments Followed a Two-Week Trial and Now Exceed $42 Million
Washington, DC − The U.S. Commodity Futures Trading Commission (CFTC) announced today that it won a judgment against CFTC defendants Robert W. Shimer of Camp Hill, Pennsylvania, and Vincent J. Firth and Equity Financial Group LLC (Equity) of Medford, New Jersey, following a two-week trial that ended September 6, 2007.
The opinion and judgment were entered on February 4, 2008 by U.S. District Judge Robert B. Kugler of the District of New Jersey, Camden Vicinage. The judgment includes a permanent injunction against the defendants, prohibiting them from engaging in any business activities related to commodity futures or options trading.
The judgment further orders disgorgement of ill-gotten gains totaling $2,514,930 and payment of a civil monetary penalties totaling $5,529,900. The court found that the penalties were warranted by the egregious nature of the defendants’ roles in fraudulently soliciting millions of dollars from investors in Shasta Capital Associates (Shasta) for investment in Tech Traders, a fraudulently run commodity pool that routinely touted double-digit monthly gains trading commodity futures, when it actually lost millions of dollars.
The judgment stems from a CFTC complaint filed on April 1, 2004, and amended on August 12, 2004, which alleged that Equity, Shimer, and Firth solicited approximately $15 million from investors for trading commodity futures contracts by Tech Traders. The complaint alleged that the defendants touted the “astonishing” performance of the Shasta commodity pool, claiming that the pool had earned trading profits of approximately 100% per annum and representing that the results were reviewed and verified by an independent Certified Public Accountant (CPA). However, the complaint alleged that there was no reasonable basis upon which to believe that the performance results were actually verified. (See CFTC Press Release, 4908-04, April 6, 2004.)
In its opinion, the court found that Equity, Shimer, and Firth fraudulently misrepresented and failed to disclose material information about their expertise, qualifications, background and compensation, their experiences in dealing with Tech Traders and their accountant. The court found that they recklessly misrepresented the performance of the Shasta commodity pool and the role of the independent CPA and accepted disbursements to which they were not entitled. The court also found that Shimer, an attorney, aided and abetted Equity’s failure to register with the CFTC as a commodity pool operator.
Court’s Judgment Resolves All Remaining Claims in the CFTC Enforcement Action
Together with two prior court orders, the judgments resolve all remaining claims in the case. On June 20, 2007, Judge Kugler entered an order that required defendants Coyt Murray and four Gastonia, North Carolina companies he controlled, Tech Traders, Inc., Tech Traders, Ltd., Magnum Investments, Ltd., and Magnum Capital Investments, Ltd., to pay more than $30 million in restitution, disgorgement and civil monetary penalties (see CFTC Press Release 5357-07, July 23, 2007). On July 7, 2006, the court ordered CPA J. Vernon Abernethy to pay $5 million in restitution and $300,000 civil monetary penalty.
The following Division of Enforcement staff members are responsible for this case: Elizabeth M. Streit, Joy McCormack, Jennifer S. Diamond, Scott R. Williamson, Rosemary Hollinger and Richard Wagner.
Last Updated: February 7, 2008