March 18, 2014
CFTC Orders Sean R. Stropp to Pay $250,000 Penalty to Settle Charges of Making False and Misleading Statements During a CFTC Investigation
Washington, DC — The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and settling charges against Sean R. Stropp (Stropp), formerly of Jupiter, Florida. Stropp is ordered to pay a $250,000 civil monetary penalty for making false and misleading statements of material fact, and omitting material facts, to CFTC staff during a CFTC Division of Enforcement (DOE) investigation. The Order enforces the false statements provision of the Commodity Exchange Act (CEA), which was added by the 2010 Dodd-Frank Act.
In addition to the $250,000 civil monetary penalty, the Order requires Stropp to cease and desist from violating the relevant provision of the CEA and permanently prohibits him from, directly or indirectly, engaging in trading on or subject to the rules of any registered entity.
According to the Order, Stropp provided DOE staff a signed and notarized financial disclosure statement in connection with the CFTC’s investigation into potentially unlawful sales of off-exchange leveraged metals contracts by Stropp and his company Barclay Metals, Inc. (Barclay). In his statement, Stropp falsely represented that the statement included all his known assets and that the statement was true, correct, and complete, per the Order. Further, the Order finds that Stropp omitted material facts from the statement, including both his control of, and his spouse’s ownership interest in, another entity selling leveraged metals contracts and his ownership and control of two of that other entity's bank accounts.
CFTC DOE Acting Director Gretchen Lowe commented, “Lying or failing to disclose material information during a CFTC investigation is unacceptable, and those who do so must bear the consequences.”
CFTC Previously Settled with Stropp
On January 28, 2013, the Commission issued an Order finding that Stropp, Barclay, and others engaged in illegal, off-exchange metals transactions in violation of the CEA (see CFTC press release 6503-13, January 28, 2013).
Related Criminal Action
On August 20, 2013, the Manhattan (New York) District Attorney’s office announced Stropp’s indictment for operating a fraudulent investment scheme through the undisclosed leveraged metals entity at issue in the Order. According to the indictment, the scheme allegedly resulted in millions of dollars of customer losses. Stropp pleaded guilty to the charges on February 4, 2014 and was sentenced to one to three years in prison in New York, where he is currently incarcerated.
CFTC DOE staff responsible for this action are Jenny Chapin, Jeff Le Riche, Steve Turley, Charles Marvine, Rick Glaser, and Richard Wagner. The CFTC thanks the Manhattan District Attorney’s Office for its assistance.
Last Updated: March 18, 2014