The US’ Commodity Futures Trading Commission (CFTC) has issued a civil injunctive enforcement action against North American Asset Management, LLC (NAAM), following the trading of illegal off-exchange instruments that solicited more than $2.5 million, according to a CFTC statement.
NAAM as well as its defendants, owner and president Alexi Bethel and owner and managing director Steven Labadie, were the subject of a formal CFTC complaint in the US Southern District Court of Florida, after a string of complaints and liabilities as outlined under the CFTC’s Commodity Exchange Act (CEA).
More specifically, the complaint charged both individuals with the engagement of illegal, off-exchange transactions of precious metals from at least March 2012 to March 2013, and possibly longer. During this period, NAAM, as well as the two aforementioned individuals, solicited retail customers via telephone to engage in leveraged, margined, and financed precious metals transactions, collecting a total of $2,565,272 from at least 66 customers – overall, commissions and fees reached a total of $648,759.60.
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Furthermore, the CFTC complaint also alleged that NAAM had wrongfully accepted customer orders and funds, whereby acting as a de-facto Futures Commission Merchant (FCM), despite there being no evidence of it registering with the CFTC as an FCM. Consequently, the trades conducted by NAAM during this period are deemed as illegal off-exchange transactions, as stipulated under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Of greater concern are allegations that that the precious metals in question were never actually delivered in connection with the trading company.
The CFTC order also alleges that NAAM managed to execute a string of illegal precious metals transactions through Hunter Wise Commodities, LLC, Lloyds Commodities, LLC, and AmeriFirst Management, LLC., all former entities that were the subject of CFTC claims and investigations previously.
Per the recent case with the US Southern District Court, the CFTC is seeking against NAAM, Mr. Bethel, and Mr. Labadie restitution of ill-gotten gains through civil monetary penalties, as well as a permanent registration and trading ban.
Unfortunately for victims of NAAM and its prior operations, restitution orders are not guaranteed to result in the recovery of damages or money lost, as NAAM, and by extension Bethel and Labadie, may not possess adequate funds.