December 12, 2017
Federal Court Orders Kevin Michael Symons of Foot Hill Ranch, California and His Firm, FTS Financial, Inc., to Pay over $5 Million Total for Fraud and Jerry Austin Simmons of Charlotte, North Carolina to Pay $360,000 for Fraud and Failure to Register with the CFTC
Washington, DC – The Commodity Futures Trading Commission (CFTC) announced that Judge Ronnie Abrams of the U.S. District Court for the Southern District of New York entered a Consent Order against Defendants Kevin Michael Symons of Foothill Ranch, California, and his California company, FTS Financial, Inc. (FTS), and a Consent Order against Jerry Austin Simmons of Charlotte, North Carolina. The Orders find that the Defendants fraudulently promoted Simmons’ “Real Time Trade Room” (the Room), an online futures “trading” forum marketed by the Defendants as a way to observe Simmons as he purported to trade futures contracts “live” and that Simmons solicited clients to open managed futures trading accounts without being registered as required with the CFTC as an Associated Person (AP) of a Commodity Trading Advisor (CTA).
The Consent Orders require FTS to pay disgorgement of $2.4 million to defrauded clients and a $2.4 million civil monetary penalty; Symons to pay disgorgement of $289,000 and a civil monetary penalty of $100,000; and Simmons to pay disgorgement of $180,000 and a civil monetary penalty of $180,000. The Orders additionally impose permanent trading and registration bans against all Defendants and a permanent injunction prohibiting them from further violating provisions of the Commodity Exchange Act and CFTC Regulations, as charged.
The Court’s Orders arise from a CFTC enforcement action filed on September 26, 2016, charging FTS, Symons, and Simmons with fraud and Simmons with also failing to register with the CFTC as an AP of a CTA (see CFTC Complaint and Press Release, 7455-16, September 27, 2016).
Simmons Consent Order
The Simmons Consent Order finds that Simmons told clients and prospective clients, falsely, that he traded futures contracts “live” in the Room. According to the Order, this was false because Simmons only engaged in hypothetical or simulated trading in the Room. In addition, according to the Order, Simmons created a false and misleading track record of his supposed trading in the Room, knowing that the performance information would be used to solicit clients. The Order also finds that Simmons created promotional materials portraying Simmons, falsely, as a “master trader” and as “an unbelievable trader, incredibly successful, high-level trader,” when in reality, Simmons never actually traded futures contracts in the Room and what little experience Simmons had trading futures contracts for himself had not been successful. The Order further finds that Simmons solicited clients to open managed futures accounts but failed to register as required with the CFTC as an AP of a CTA.
FTS/Symons Consent Order
The FTS/Symons Consent Order finds that FTS and Symons told clients and prospective clients, falsely, that trading in the Room was conducted by a “professional trader” and that all the trading was conducted “live” with real money at risk. The Order also finds that FTS and Symons told clients and prospective clients that trading in the Room generated substantial profits — profits that, if annualized, amounted to a return of more than 400%. In reality, according to the Order, all of these statements were false because there never were any futures contracts traded in the Room and all supposed trading was in fact simulated. The Order further finds that FTS provided supposed past performance information to clients and prospective clients but failed prominently to display in immediate proximity to this performance information prescribed disclosures relating to the inherent limitations of such simulated or hypothetical performance information.
The CFTC cautions that Orders requiring the repayment of funds to victims may not result in the recovery of any 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 that wrongdoers are held accountable.
CFTC Division of Enforcement staff members responsible for this case are Katie Rasor, R. Stephen Painter, Jr., David W. MacGregor, Lenel Hickson, Jr., and Manal M. Sultan.
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CFTC’s Fraud Advisories, Including Commodity Trading Systems Sold on the Internet
The CFTC has issued several customer protection Fraud Advisories that provide warning signs of fraud, including the Commodity Trading Systems Sold on the Internet Advisory, which helps customers identify this potential fraud.
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: December 12, 2017