For Release: December 3, 2008
Florida Federal Court Issues Preliminary Injunctions in CFTC Anti-Fraud Action against Florida Commodity Pool Operator Phoenix Diversified Investment Corporation, Inc., and its Principal Michael A. Meisner
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced the issuance of consent orders of preliminary injunction by the U.S. District Court for the Southern District of Florida against Phoenix Diversified Investment Corporation, Inc. (Phoenix), a commodity pool operator (CPO) based in Boca Raton, Florida, and its former president and director Michael A. Meisner.
The orders, entered by the Honorable Kenneth L. Ryskamp, prohibit Phoenix and Meisner from engaging in fraud, deception, or making false statements in connection with the trading of commodity futures and options. The orders also freeze certain assets of Meisner, Phoenix, and Meisner’s wife, Victoria R. Meisner, and prohibit them from dissipating, withdrawing, transferring, removing, concealing or disposing of financial or physical assets. In the continuing litigation in this action, the CFTC seeks permanent injunctive and other equitable relief including, the disgorgement of ill-gotten gains and civil monetary penalties.
The consent orders stem from a complaint filed by the CFTC on September 23, 2008 (see CFTC Press Release 5556-08, September 25, 2008). The CFTC complaint charges that Meisner and Phoenix fraudulently solicited investors to participate in a commodity pool operated under the name of Phoenix, misappropriated investors’ funds, and issued false account statements to investors that overstated the value of their interests in the pool.
The CFTC alleges that the trading accounts associated with the commodity pool suffered net losses of approximately $5.8 million between May 2003 and March 2008, even as Meisner and Phoenix touted profits. The complaint charges that Meisner concealed losses by using monies received from “new” pool participants to repay “earlier” pool participants, in a manner characteristic of a Ponzi scheme. The scheme collapsed around April 21, 2008, when Phoenix shuttered its doors without warning. The complaint further alleges that on April 22, 2008, Meisner sent a letter to pool participants admitting that Phoenix’s trading accounts were depleted, and that he had misappropriated pool participant funds to support a lavish lifestyle.
The CFTC’s complaint also charges Phoenix with operating as a CPO without being registered with the CFTC. Victoria Meisner is named in the complaint as a relief defendant for allegedly receiving at least $1 million of participant funds to which she is not entitled.
The CFTC appreciates the assistance of the State of Florida, Office of Financial Regulation, Bureau of Financial Investigations in this matter.
The following CFTC Division of Enforcement staff members are responsible for this case: Ava M. Gould, Jon Kramer, Donald Nash, Scott Williamson, Rosemary Hollinger, and Richard Wagner.
R. David Gary
Last Updated: December 3, 2008