Commodity Futures Trading Commission
Office of External Affairs (202) 418-5080
Three Lafayette Centre
1155 21st Street, NW
Washington, DC 20581

Release: 4946-04
For Release: June 29, 2004


U.S. Commodity Futures Trading Commission Alleges That Sterling Trading Group, Inc., Universal FX, Inc., and Employees Joseph Arsenault and Andrew Stern Defrauded Customers

WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today that on June 9, 2004, a federal district court judge in Florida, acting on a CFTC complaint filed on June 7, 2004, issued an order preventing the destruction of the books and records of defendants Sterling Trading Group, Inc. (Sterling), Universal FX, Inc. (Universal), QIX, Inc. (QIX), Graystone Browne Financial, Inc. (Graystone), Joseph Arsenault, and Andrew Stern of Florida, and STG Trading Group, Inc. (STG) of Los Angeles, CA.

Defendants Sterling, Universal, Arsenault, and Stern are charged with fraud and offering illegal foreign currency (forex) futures contracts to retail customers. Defendants STG, Graystone, QIX, Arsenault, and Stern are charged with offering illegal options contracts. The CFTC complaint also charges Universal, QIX, and Stern with falsely stating or implying that Universal and QIX were members of a registered entity and/or CFTC registrants.

According to the complaint, between approximately June 2002 and July 2003, defendant Sterling, under the control of Arsenault, solicited retail customers nationwide to trade illegal foreign currency futures contracts with Universal, which was controlled by Stern. The complaint alleges that Sterling and Universal defrauded retail customers nationwide through misleading and deceptive sales solicitations and deceptive trading, including systematically charging customers significant undisclosed fees. Further, the complaint alleges that since about August 2003, defendants STG and Graystone, under the control of Arsenault, have been soliciting retail customers to trade illegal foreign currency options contracts with QIX, which is owned and controlled by Stern.

The CFTC is seeking a permanent injunction against each defendant, restitution to defrauded customers, a return of all ill-gotten gains from the defendants, and civil penalties for each violation of the Commodity Exchange Act.

The following Division of Enforcement staff are responsible for this case: Peter M. Haas, Eugene Smith, Ghassan Hitti, Charlotte Ohlmiller, and Kyong J. Koh.

# # #

Media Contacts
Alan Sobba
(202) 418-5080
Dennis Holden
(202) 418-5088
Office of External Affairs

Staff Contact
Paul Hayeck, Associate Director, CFTC Division of Enforcement
(202) 418-5312

Related Documents