The US Commodity Futures Trading Commission has obtained more than USD6.75m in civil monetary penalties and equitable relief in a court order against American Derivatives, Brokerage Management, Layne D. Gerstel and Devereaux D. Booth, all of Atlanta, Georgia, and David N. Mittler of Aventura, Florida.
The consent order of permanent injunction, entered on 15 December 2009 in the US District Court for the Northern District of Georgia, resolves a CFTC enforcement action that charged defendants with fraudulently soliciting more than 274 customers to trade commodity options and failing to supervise employees committing such fraud.
Specifically, the order requires the defendants collectively to pay USD5,369,000 in restitution to defrauded customers and USD1.4m in civil penalties.
The order also permanently prohibits them from engaging in commodity-related activity, including registering with the CFTC in any capacity.
In 2008, the court issued a consent order against defendants National Commodities Corporation and International Commodity Clearing, both of Fort Lauderdale, Florida, and formerly registered futures commission merchants and guarantors of American Derivatives.
The order holds NCC and ICC jointly and severally liable for that portion of American Derivatives’ restitution obligation attributable to the period of time during which each company’s guarantee agreement with ADC was in effect.
