For Release: November 9, 2009
Federal Court Orders Canadian Trio to Pay More than Equivalent $2.2 Million in Restitution, Disgorgement and Penalties in CFTC Commodity Pool Anti-Fraud Action
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that a federal court entered default judgment orders against defendants Robin States (States) and his wife, Bernadette Bowden (Bowden), both of Nova Scotia, Canada, and relief defendant Paul States, of British Columbia, Canada, in a CFTC action charging the defendants with fraudulent solicitation and misappropriation in connection with the operation of commodity pool known as Infinity Online Investors Group (Infinity) (see CFTC Press Release 5524-08, July 29, 2008).
The orders, entered by the Honorable Donald L. Graham of the U.S. District Court for the Southern District of Florida, require the trio to pay more than an equivalent of $2.2 million in fines and equitable relief: States and Bowden are ordered to jointly and severally pay Can$ 643,047 in restitution; States a $910,000 civil monetary penalty and Bowden a $520,000 civil monetary penalty. In addition the court ordered Paul States, brother of Robin States, to disgorge Can$ 230,481 in ill-gotten gains. The orders also prohibit States and Bowden from engaging in any commodity-related activity, including registering with the CFTC in any capacity.
The default orders find that States and Bowden fraudulently solicited approximately Can$ 643,047 from approximately 900 individuals in the United States, Canada and elsewhere to participate in Infinity, a commodity pool that purported to invest in commodity futures, options, foreign exchange and precious metals. According to the orders, Infinity never did any trading. Instead States and Bowden misappropriated the participants’ funds and used them to pay purported profits to participants and to pay for personal expenses, goods and services. The orders also find that the defendants funneled pool participants’ funds to relief defendant Paul States, who had no legitimate interest or entitlement to the funds
The CFTC gratefully acknowledges the assistance of the Nova Scotia Securities Commission, the British Columbia Securities Commission, the Quebec Autorité des Marchés Financiers, the Ontario Securities Commission, the Alberta Securities Commission, the Royal Canadian Mounted Police and the Autorité des Marchés Financiers of France in investigating this matter.
The following CFTC Division of Enforcement staff members are responsible for this case: Alan I. Edelman, James H. Holl, III, Kara Mucha, Michelle Bougas, Gretchen L. Lowe and Vincent McGonagle.
Last Updated: November 9, 2009