August 2, 2013

CFTC Obtains Default Judgment against Christopher Smithers of Florida for Fraud in Connection with Futures Contracts, Fraud in Connection with Contracts of Sale of a Commodity in Interstate Commerce, and Violations of a United States District Court’s Prior Orders

Defendant defrauded customers in trading commodity futures contracts and in the purchase of gold bullion

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge Kenneth A. Marra of the U.S. District Court for the Southern District of Florida entered an Order of default judgment and permanent injunction against Christopher Smithers of Jupiter, Florida. The Order requires Smithers to pay a $590,940 civil monetary penalty and $196,980 in restitution, imposes permanent trading and registration bans against Smithers, and prohibits Smithers from violating the Commodity Exchange Act (CEA) and CFTC regulations, as charged.

The court’s Order, entered on July 31, 2013, stems from a CFTC Complaint filed on October 22, 2012, charging Smithers with violating anti-fraud provisions of the CEA and CFTC regulations as well as provisions of the CEA proscribing violations of a court Order. The case is U.S. Commodity Futures Trading Commission v. Christopher Smithers, Case No. 9:12-cv-81165-KAM (see CFTC Press Release 6397-12).

The court’s Order finds that from October 2008 to March 2009, Smithers misrepresented to customers that his commodity futures trading was profitable when it actually resulted in losses of $220,000. Further, the court’s Order finds that from June 22, 2011, through November 2011, Smithers falsely represented to various Futures Commission Merchants the identity of the person who opened and controlled commodity futures trading accounts that, in reality, he had opened and controlled. Smithers made such misrepresentations to circumvent prior U.S. District Court Orders that prohibited him from trading commodity futures contracts.

In addition, the court’s Order finds that in 2011, Smithers misappropriated $162,980 of a customer’s funds that were provided to him for the purchase of gold bullion, and that he fraudulently solicited a customer for funds with which to trade commodity futures. Finally, the court’s Order finds that Smithers’ commodity futures trading was in violation of two previous U.S. District Court for the Southern District of Florida Orders of permanent injunction entered against him in CFTC v. Matrix Trading Group., Inc., David Weeden, and Christopher Smithers, Civil Action No. 00-8880-CIV-ZLOCH (S.D. Fla. Oct. 3, 2002), and CFTC v. Christopher Smithers, Prosperity Consultants, Inc., and Jack Smithers, Case No. 05-80592-CIV-Hurley (S.D. Fla. Nov. 6, 2006).

CFTC Division of Enforcement staff responsible for this case are Harry E. Wedewer, Dmitriy Vilenskiy, Danielle E. Karst, John Einstman, Paul G. Hayeck, and Joan M. Manley.

Last Updated: August 2, 2013