The US Commodity Futures Trading Commission has obtained a judgment against Aurifex Commodities Research Company of Mason, Michigan, requiring the company to pay USD30,000 in restitution a
The US Commodity Futures Trading Commission has obtained a judgment against Aurifex Commodities Research Company of Mason, Michigan, requiring the company to pay USD30,000 in restitution and a USD120,000 civil monetary penalty to resolve CFTC charges of hedge fund fraud.
The consent order of permanent injunction, entered on November 24, by judge Robert Holmes Bell of the US District Court for the Western District of Michigan, ends all litigation against the named defendants in the action CFTC v. Aurifex Commodities Research Co.
On March 7, 2006, the CFTC charged Ty and Monette Klotz and their two companies, Aurifex Commodities Research Company and Aurifex Research, with fraud in operating a Ponzi-like scheme while operating and soliciting participants for what they called a ‘private hedge fund’.
On February 1 this year, Bell ordered Ty and Monette Klotz to pay more than USD3.1m in sanctions for their fraudulent conduct, which affected some 350 individuals who invested at least USD2.2m.
On February 15, Bell entered a default judgment against Aurifex Research, one of the companies utilized by the Klotzes to perpetuate their fraudulent investment scheme.
The court held that the company misappropriated investor funds, made material misrepresentations to the hedge fund participants, and was responsible for Ty Klotz’s issuance of fraudulent statements to investors reporting false profits.
Aurifex Research was ordered to pay USD1.83m in restitution, the amount owed to the 353 defrauded investors, and an additional USD960,000 in penalties for its role in the fraud.
