Lake Worth, Florida-based company Vertical Integration Group, LLC, along with its Managing Members Richard V. Morello, also of Lake Worth, and Boynton Beach, Florida-based Junior Alexis have been ordered by a Federal Court to pay monetary sanctions for their part in illegal, off-exchange precious metals transactions.
According to the Order of Default Judgment by the U.S. District Court for the Southern District of Florida, Vertical Integration Group, by and through Richard Morello and Junior Alexis, solicited investors to engage in off-exchange leveraged, margined, or financed precious metals transactions, executed through Hunter Wise Commodities LLC. The precious metals included gold, silver, platinum and palladium. The Order states that approximately 39 customers of Vertical Integration Group invested over $1 million and ended up losing $893,859 of their monies to trading losses, commissions, fees and other charges. The Order further states that Vertical Integration Group received commissions and fees totaling $554,566 for these precious metals transactions.
Leveraged precious metals transactions that are leveraged, margined or financed are considered illegal, off-exchange transactions unless they result in delivery of the commodity within 28 days. According to the Federal Order against Vertical Integration Group, Richard Morello and Junior Alexis, the metals were never actually delivered on behalf of the investor customers.
Consequently, the Federal Court has ordered Vertical Integration Group and Richard Morello to pay over $2.5 million in monetary sanctions, and for Junior Alexis to pay over $700,000 for his role in the illegal transactions. The Order also imposes permanent trade, solicitation, and registration bans for Richard Morello and Junior Alexis and prohibits them from participating in future illegal, off-exchange retail commodity transactions.
Attorney Pearce has been and is currently involved in several U.S. Commodity Futures Trading Commission (CFTC) investigations and arbitration proceedings defending clients involved in leveraged precious metals businesses. One CFTC investigation resulted in no action whatsoever and the other investigations were successfully resolved by settlement with the Commission. Recently, Mr. Pearce obtained a full dismissal of all claims made against his brokerage client in a leveraged precious metals arbitration proceeding.
Have you have been contacted by the CFTC or believe that you may be subject of an investigation? If so, call Mr. Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce defends various entities and individuals who may be the subject of a CFTC investigation or enforcement action regarding their alleged involvement in commodities laws violations.
This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over , Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to representing investors and financial industry professionals throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at email@example.com for answers to any of your questions about this blog post and/or any related matter.