Release: #4695-02
For Release: September 4, 2002


CFTC Charges John Martin Lofgren and Melrose Asset Management With Fraud

WASHINGTON, D.C. -- The U.S. Commodity Futures Trading Commission (CFTC) announced today the filing of an enforcement action on August 30, 2002, in federal court against a commodity pool operator and its chief executive officer for misappropriating over $1.4 million in customer funds from a commodity pool and sending false statements to at least two investors to cover up the fraud.

Named in the CFTC complaint are: John Martin Lofgren of Kenilworth, Illinois, and Melrose Asset Management of Chicago, Illinois. Lofgren is the chief executive officer of Melrose Asset Management, a registered commodity pool operator, and is registered in the futures industry as an associated person of Melrose Asset Management.

Federal Court Issues Order Freezing Defendants’ Assets

On the same day the complaint was filed, the Honorable William J. Hibbler of the United States District Court for the Northern District of Illinois issued an order freezing the assets of the defendants, prohibiting the destruction of books and records, and appointing Stephen T. Bobo as receiver to marshal the assets of the defendants.

CFTC Alleges Defendants Misappropriated Investor Funds and Issued False Statements to the Investors To Conceal the Fraud

The CFTC complaint charges that, since at least January 2001, the defendants have misappropriated at least $1.4 million in investor funds entrusted to them to trade commodity futures and commodity options in a commodity pool entitled The Melrose Fund, L.L.C. To cover up their fraud, the complaint alleges, Lofgren prepared and sent false account statements to some investors that did not show the defendants’ unauthorized withdrawals from the pool.

In its litigation, the CFTC is seeking preliminary and permanent injunctive relief, restitution for defrauded customers, disgorgement of ill-gotten gains, and civil monetary penalties against each defendant of $120,000 per violation or triple the monetary gain, whichever is greater.

The following CFTC Division of Enforcement staff members are responsible for this case: Elizabeth M. Streit, Ava Gould, Hugh Rooney, and Scott Williamson.

A copy of the CFTC complaint and restraining order may be obtained at www.

Media Contact on this Case:
Scott Williamson
Acting Regional Counsel
CFTC Chicago Regional Office
(312) 596-0520

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