The Commodity Futures Trading Commission (CFTC) obtained USD1,127,855 in restitution for defrauded pool participants and USD3,383,565 in civil monetary penalties in a federal court Default Judgment Order against Defendants.
Gerard Suite (who is known by numerous aliases, including Rawle Gerard Suite, Jerry Suite, and Jerry Snead) and his company, STA Opus are to pay over USD4.5 million to settle US CFTC charges over a fraudulent commodity pool scheme.
The CFTC has obtained USD1,127,855 in restitution for defrauded pool participants and USD3,383,565 in civil monetary penalties in a federal court Default Judgment Order against Defendants, as well as a Consent Order against Frank Collins for knowingly or recklessly misappropriating at least USD50,000 of STA Opus customers’ funds.
The Court’s Orders stem from a CFTC Complaint filed on 8 August, 2016.
The Default Order, entered by the Honourable Andrew J Guilford, of the US District Court for the Central District of California on 13 November , 2017, finds that from at least January 2013 through 6 May, 2016, when Suite was arrested by FBI agents, Suite and STA Opus fraudulently solicited customers by falsely representing that STA Opus’ commodity pool had positive annual rates of return, when in fact, STA Opus’ three commodity futures trading accounts had lost virtually all of the funds the defendants committed to trading, and failing to disclose a prior disciplinary history with the CFTC and State of California that included USD2.5 million in restitution and fines in connection with conducting business as an unregistered investment advisor in California.
The Default Order also finds that Suite and STA Opus misappropriated USD1,127,855 of pool participants’ monies and issued false account statements to participants that concealed their misappropriation of participants’ monies.
The Default Order further finds that STA Opus was acting as an unregistered commodity pool operator (CPO) and that Suite was acting as an unregistered associated person of the CPO when they fraudulently solicited pool participants.
The Consent Order, also entered by the Honourable Andrew J Guilford on 13 September , 2017, requires Collins to pay USD50,000 in restitution to STA Opus customers and imposes a USD50,000 civil monetary penalty against Collins. The Consent Order finds that Collins helped Suite get his STA Opus business started in late 2012, after which at least 30 individuals invested approximately USD1.6 million in the STA Opus commodity pool, and that Collins misappropriated at least USD50,000 of those funds for his own benefit.
In addition to requiring Suite, Collins, and STA Opus to pay restitution and civil monetary penalties, the Orders also permanently prohibit them from further violations of the anti-fraud provisions of the Commodity Exchange Act and CFTC Regulations, as charged, and enter permanent trading, solicitation, and registration bans against Suite and Collins.
The CFTC cautions that Orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.
The CFTC thanks and acknowledges the assistance of the Federal Bureau of Investigation (Orange County, California) and the US Attorney’s Office for the Central District of California.
