For Release: December 16, 2009
Federal Court in Georgia Imposes More than $6.75 Million in Fines and Other Sanctions in CFTC Action Charging Commodity Options Fraud
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that it obtained more than $6.75 million in civil monetary penalties and equitable relief in a court order against American Derivatives Corp. (ADC), Brokerage Management Corp., Layne D. Gerstel and Devereaux D. Booth, all of Atlanta, Ga., and David N. Mittler of Aventura, Fla.
The consent order of permanent injunction, entered on December 15, 2009, in the U.S. District Court for the Northern District of Georgia, resolves a CFTC enforcement action that charged defendants with fraudulently soliciting more than 274 customers to trade commodity options and failing to supervise employees committing such fraud (see CFTC Press Release 5125-05, October 5, 2005).
Specifically, the order requires the defendants collectively to pay $5,369,000 in restitution to defrauded customers and $1.4 million in civil penalties. The order also permanently prohibits them from engaging in commodity-related activity, including registering with the CFTC in any capacity.
In 2008, the court issued a consent order against defendants National Commodities Corporation, Inc. (NCCI) and International Commodity Clearing, LLC (ICC), both of Fort Lauderdale, Fla., and formerly registered futures commission merchants and guarantors of ADC. The order holds NCCI and ICC jointly and severally liable for that portion of ADC’s restitution obligation attributable to the period of time during which each company’s guarantee agreement with ADC was in effect (see CFTC Press Release 5460-08, February 21, 2008).
The following CFTC Division of Enforcement staff members are responsible for this case: Daniel C. Jordan, Kathleen Banar, James Deacon, Richard Glaser and Richard Wagner.
Last Updated: December 16, 2009