September 17, 2014
CFTC Orders Florida Resident Sean F. McCabe and His Company WorldPMX, Inc. to Pay Restitution and a Civil Monetary Penalty of More than $1.1 Million for Engaging in Illegal, Off-Exchange Precious Metals Transactions
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that it entered an Order filing and simultaneously settling charges against Sean F. McCabe, a resident of Sunny Isles, Florida, and his company, WorldPMX, Inc. (WorldPMX), for engaging in illegal, off-exchange precious metals transactions and for operating WorldPMX as an unregistered Futures Commission Merchant (FCM). The CFTC Order requires McCabe and WorldPMX jointly to pay restitution totaling $1,048,807 and a civil monetary penalty of $140,000. In addition, the Order imposes permanent registration and trading bans on McCabe and WorldPMX.
The Order finds that from at least March 2012 to February 2013, WorldPMX solicited and accepted at least $2.4 million from retail customers to engage in financed transactions in precious metals, such as gold, silver, and platinum. The Order further finds that McCabe solicited customers directly and supervised other telemarketers involved in solicitation. According to the Order, WorldPMX would contact AmeriFirst Management LLC (AmeriFirst) to execute the customers’ buy or sell orders, and then confirmed the execution of the transactions to the customers. In connection with those financed precious metals transactions, WorldPMX accepted money from or extended credit to its customers to margin, guarantee, or secure trades when it was not registered with the CFTC as an FCM, according to the Order.
As stated in the Order, financed transactions in commodities with retail customers, like those in which WorldPMX engaged, must be executed on or subject to the rules of an exchange approved by the CFTC. According to the Order, however, McCabe and WorldPMX offered financed off-exchange transactions in precious metals. The Order finds that neither WorldPMX nor AmeriFirst delivered any precious metals in connection with these transactions. The Order also finds that, in connection with these transactions, WorldPMX received commissions and fees totaling $1,048,807.
On July 30, 2013, the CFTC sued AmeriFirst in federal court in Florida charging it with engaging in illegal, off-exchange precious metals transactions, fraud, and other violations (see CFTC Press Release 6655-13). On July 24, 2014, the court entered a supplemental consent Order against AmeriFirst and the three individual defendants in that case requiring them to pay more than $25 million in restitution and $10 million in civil monetary penalties (see CFTC Press Release 6973-14).
The CFTC cautions victims that restitution orders may not result in the recovery of money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.
The CFTC thanks the Florida Department of Agriculture and Consumer Services for its assistance in this matter.
CFTC Division of Enforcement staff members responsible for this case are Karin N. Roth, Michael C. McLaughlin, David W. MacGregor, Douglas K. Yatter, Lenel Hickson, Jr., and Manal M. Sultan.
* * * * *
CFTC’s Precious Metals Customer Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Precious Metals Fraud Advisory, which alerts customers to precious metals fraud and lists simple ways to spot precious metals scams.
Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.
Last Updated: September 17, 2014