Articles Posted in CFTC News

The U.S. Commodity Futures Trading Commission (CFTC) has issued an Order against Arya Motazedi, of Miami Florida, for engaging in fraudulent gas and crude oil futures transactions. According to the Order, Mr. Motazedi prearranged nearly 34 trades between his former employer’s account and his personal accounts at prices which disadvantaged his former employer’s account. In a practice known as “front running,” Mr. Motazedi allegedly placed orders for his personal accounts ahead of orders he placed for his former employer’s account on at least 12 occasions. The Order states that Mr. Motazedi’s trading activity caused his former employer trading losses of $216,955.80.

The CFTC Order further states that Mr. Motazedi was able to accomplish his fraud by misappropriating non-public, confidential, and material information despite the employer’s internal policies prohibiting such practices and his duty to confidentiality given his relationship with his employer. Moreover, the Order states that Mr. Motazedi breached his duties to his employer by failing to disclose the trading. The CFTC’s Order requires Mr. Motazedi to pay a monetary penalty of $100,000 and restitution of $216,955.80. Additionally, the Order permanently bans Mr. Motazedi from trading and registering as a futures professional in any capacity with the CFTC. Continue Reading

The U.S. Commodity Futures Trading Commission (CFTC) has obtained a Consent Order against James Harvey Mason of Graham, North Carolina. The CFTC found that Mr. Mason was never registered with the CFTC in any capacity. According the CFTC, the consent order against Mr. Mason imposes a $1.67 million civil monetary penalty and restitution of $3.88 million in relevance to off-exchange foreign currency commodity pool fraud along with a permanent trading and registration ban.

The CFTC alleged that around July 2010, Mr. Mason fraudulently solicited, accepted and pooled approximately $5,300,000 from about 500 individuals. According to the CFTC, Mr. Mason only used a portion of the funds to trade off-exchange foreign contracts in two commodity pools he formed; the JHM Forex Only Pool and Forex Trading at Home. He allegedly deposited investor funds in bank accounts from when he allegedly misappropriated approximately $780,000 and made payments as part of a “Ponzi sheme.” A “Ponzi scheme” is an unsustainable fraud pyramid that inevitably ends in ruin. Schemers use money raised from latter investors to pay an earlier investor’s returns. Ponzi schemes invariably fall apart when markets deteriorate or when the schemer is unable to raise more cash. Continue Reading

The U.S. District Court for the Southern District of Florida has ordered Delray Beach Florida resident Stavros Papastavrou and his Pompano Beach, Florida company, Inter-Global Currency & Precious Metals, LLC (IGCPM), to pay nearly $550,000 for allegedly committing illegal off-exchange precious metals fraud.

The Consent Order states that IGCPM and Mr. Papastavrou solicited customers by phone to engage in leveraged, margined, or financed precious metals transactions. According to the Order, customers paid at least $1 million to IGCPM for these precious metals transactions, and IGCPM received at least $447,342 in commissions and fees. Continue Reading

The U.S. Commodity Futures Trading Commission (CFTC) has ordered New York resident Mark Bloom, along with his firm North Hills Management, LLC to pay a $26 million civil monetary penalty for operating a fraudulent commodity pool called North Hills LP and for misappropriating customer funds.

The CFTC Order states that Mr. Bloom and North Hills Management misappropriated approximately $13 million from North Hills LP between 2002 and 2009. During this time, Mr. Bloom lived a lavish lifestyle, including the purchase of a $5 million Manhattan apartment. The Consent Order found that Mr. Bloom and North Hills Management made several misrepresentations and omissions to pool participants. On July 30, 2009 Mr. Bloom plead guilty to charges of misappropriation and concealment in a parallel criminal proceeding. Mr. Bloom is still awaiting sentencing in his criminal case and will be required to pay restitution in an amount to be decided by the court. Continue Reading

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