Mon, 04/01/2010 - 11:18
The US Commodity Futures Trading Commission has obtained a preliminary injunction against Matthew B. Pizzolato, formerly of Tickfaw, Louisiana, William C. Guidry of Plano, Texas, and Capital Funding Consultants of Covington, Louisiana.
The CFTC charged the defendants in November 2009 with fraud in connection with the operation of a commodity pool.
The preliminary injunction order, entered on 10 December 2009 by US District Court Judge Mary Ann Vial Lemmon, continues the asset freeze Judge Lemmon entered against the defendants on 20 November 2009, and prohibits the defendants from further violations of federal commodity law.
The order finds that there is a reasonable likelihood that the CFTC would prevail on the merits of its case and that a preliminary injunction is necessary to protect the public from further loss and damage and to enable the CFTC to fulfill its statutory duties.
Specifically, the order finds that Pizzolato, as part of a broader scheme in which he solicited USD19.5m, obtained more than USD3.1m from 24 mostly elderly investors, which he gave to Guidry to invest.
Despite representing to these elderly investors that their funds would be invested in safe, secure investments with guaranteed rates of return, Pizzolato gave the funds to Guidry to trade high risk commodity futures, among other things.
The order also finds that Guidry and Capital Funding misappropriated more than USD221,815.53 of investor funds for personal purposes, and used some of those misappropriated funds to trade commodity futures in accounts owned by Capital Funding. The investors were not told about Guidry’s commodity futures trading losses.
The order further finds that Guidry and Capital Funding commingled commodity pool participants’ funds with the funds of other persons.
On the same day that the CFTC filed its civil complaint, Pizzolato was arrested, charged with felony offences and indicted by a federal grand jury for operating a USD19.5m Ponzi scheme. Pizzolato has been detained and remains in custody in connection with the criminal charges.
In the continuing litigation, the CFTC is seeking permanent injunctive relief, repayment of ill-gotten gains to defrauded investors, civil penalties and other equitable relief.
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