CFTC freezes over USD 1.5 million in fraud case
The CFTC has Charged Stuart Pippin of Pippin Investments with fraud for issuing false trading results to pool participants.
Gregory G. Mocek, CFTC Director of Enforcement, said:"We needed to stop this scheme dead in its tracks to protect customers. We achieved that goal by freezing over USD 1.5 million in funds, or nearly 93 percent of the funds invested in this commodity pool. The public should be very wary of entrusting funds for highly speculative futures trading with individuals and firms that are not properly registered."
The US Commodity Futures Trading Commission (CFTC) announced today that a federal court in Brooklyn, New York entered a restraining order against defendant Stuart Pippin, individually and doing business as Pippin Investments, freezing Pippin's assets and preventing the destruction or alteration of books and business records. Pippin resides in San Antonio, Texas.
The court's order, entered on August 29, 2005, arises from a CFTC complaint filed earlier that day, alleging, among other things, that between June 2004 and the present, Pippin received more than USD 1.9 million dollars from approximately 35 commodity pool participants to trade crude oil futures contracts on their behalf.The complaint alleges that Pippin then transferred that money to his personal bank account.
The complaint further alleges that, in sworn testimony before CFTC staff on August 24, Pippin admitted that he sent monthly statements to the pool participants falsely claiming that, in the aggregate, the participations in the pool were worth more than USD 4.2 million as a result of profitable trading.As alleged, Pippin admitted that he made only one futures trade, which lost USD 90.The complaint also alleges, and Pippin admitted, that he never registered with the Commission as a commodity pool operator.
United States District Judge John Gleeson of the U.S. District Court for the Eastern District of New York ordered a preliminary injunction hearing for September 8, 2005.
In its ongoing litigation, the CFTC is seeking a permanent injunction against the defendant, restitution to defrauded pool participants, disgorgement of ill-gotten gains, and a monetary penalty. The CFTC appreciates the assistance of the National Futures Association leading up to this action.
The following CFTC Division of Enforcement staff members are responsible for this case: Sheila Marhamati, Philip Rix, Steven Ringer, Stephen Obie, and Richard Wagner.
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