Mon, 08/12/2008 - 12:00
The US Commodity Futures Trading Commission has announced the issue of preliminary injunctions by the US District Court for the Southern District of Florida against the commodity pool operator Phoenix Diversified Investment Corporation and its former president and director Michael Meisner.
The orders, entered by the Honorable Kenneth Ryskamp, prohibit Phoenix and Meisner from engaging in fraud, deception, or making false statements in connection with the trading of commodity futures and options.
The orders also freeze certain assets of Meisner, Phoenix, and Meisner's wife, Victoria Meisner, and prohibit them from dissipating, withdrawing, transferring, removing, concealing or disposing of financial or physical assets.
In the continuing litigation in this action, the CFTC seeks permanent injunctive and other equitable relief including the disgorgement of ill-gotten gains and civil monetary penalties.
The consent orders stem from a complaint filed by the Commission on 23 September, 2008.
The CFTC complaint charges that Meisner and Phoenix fraudulently solicited investors to participate in a commodity pool operated under the name of Phoenix, misappropriated investors' funds, and issued false account statements to investors that overstated the value of their interests in the pool.
The Commission alleges that the trading accounts associated with the commodity pool suffered net losses of approximately USD5.8 between May 2003 and March 2008, even as Meisner and Phoenix touted profits.
The complaint charges that Meisner concealed losses by using monies received from new pool participants to repay earlier pool participants, in a manner characteristic of a Ponzi scheme.
The scheme collapsed around 21 April, 2008 when Phoenix shut its doors without warning.
The complaint further alleges that on 22 April, 2008 Meisner sent a letter to pool participants admitting that Phoenix's trading accounts were depleted, and that he had misappropriated pool participant funds to support a lavish lifestyle.
The CFTC's complaint also charges Phoenix with operating as a commodity pool operator without being registered with it.
Victoria Meisner is named in the complaint as a relief defendant for allegedly receiving at least USD1m of participant funds to which she is not entitled.
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