September 4, 2013
CFTC Orders Florida Resident Matthew L. Hall to Pay over $200,000 in Restitution for Illegal, Off-Exchange Precious Metals Transactions
Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against Matthew L. Hall, individually and doing business as Pacific Exchange Group (PEG), for engaging in illegal, off-exchange precious metals transactions. Hall resides in West Palm Beach, Florida, and PEG is a telemarketing firm with a virtual office in Henderson, Nevada. Neither Hall nor PEG has ever been registered with the CFTC.
The CFTC Order requires Hall to pay $202,577, in restitution to his customers. In addition, the Order imposes permanent registration and trading bans on him.
As explained in the Order, financed transactions in commodities with retail customers, like those engaged in by Hall, must be executed on or subject to the rules of an exchange approved by the CFTC. Since Hall’s transactions were executed off exchange, they were illegal.
Specifically, the CFTC Order finds that from late April 2012 through February 2013, Hall solicited retail customers, generally by telephone or through the PEG website, to invest in financed precious metals transactions, which were executed through Hunter Wise Commodities, LLC (Hunter Wise). Hall, individually and through his employees and agents, represented to prospective customers that 1) the customer could purchase physical commodities, including gold, silver, copper, platinum, or palladium, by paying as little as 20% of the purchase price, 2) customers would receive a loan for the remaining portion of the purchase price on which they would be charged interest, and 3) upon confirmation of the purchase, the physical commodity would be stored at an independent depository in an account in the customer’s name, the Order finds. These representations were based upon representations Hunter Wise made to Hall about Hunter Wise’s operations, according to the Order.
When retail customers placed orders with Hall to enter into retail commodity transactions, Hall simply passed all the details of the purchase, customer payments, and financing on to Hunter Wise, whose existence the Hall did not disclose to retail customers. In return, Hunter Wise paid Hall a portion of the customer commissions and fees, with Hall ultimately receiving commissions and fees totaling $202,577, the Order further finds. Neither Hall nor Hunter Wise bought, sold, loaned, stored, or transferred any physical metals for these transactions, and neither Hall nor Hunter Wise actually delivered any precious metals to any customer, according to the Order.
The CFTC sued Hunter Wise in federal court in Florida on December 5, 2012. The CFTC charged Hunter Wise with engaging in illegal, off-exchange precious metals transactions, as well as fraud and other violations (see CFTC Press Release 6447-12). On February 25, 2013, the federal court entered a preliminary injunction against Hunter Wise, froze the firm’s assets and appointed a corporate monitor to assume control over Hunter Wise’s assets (see CFTC Press Release 6522-13).
The CFTC Division of Enforcement staff members responsible for this case are Diane M. Romaniuk, Mary Elizabeth Spear, Ava M. Gould, Scott Williamson, Rosemary Hollinger, and Richard B. Wagner.
Last Updated: September 4, 2013