The US Commodity Futures Trading Commission announced that it received an Illinois federal judge’s blessing to fine Mark Slobodnik and his company Blue Guru, LLC nearly $370,000 for fraud and failing to register with the CFTC.
The default judgment order, issued by US district judge Manish Shah on Friday, follows a CFTC complaint filed in January 2018 against Slobodnik, a former member of the CME exchange, Richard Carter, 49, of Mundelein and Blue Guru with fraud, misappropriation and failing to register with the CFTC.
The order requires defendants and the firm to pay a $45,000 civil monetary penalty and disgorge roughly $45,000 in ill-gotten gains plus $280,000 to defrauded pool participants. Additionally, it imposes permanent trading and registration bans against Slobodnik and his company.
ATFX Institutional Business Continues to Expand: Adding a New Prime BrokerGo to article >>
According to the complaint, the fraud scheme began in April 2014 and continued to January of this year. Slobodnik allegedly told clients their investments would be traded through a clearinghouse called Straits Financial and sent some of them fabricated statements showing that the firm held a balance of more than $6.1 million.
Blue Guru, a Lincolnshire-based firm that claimed to specialize in trading futures contracts, held only $9,000 in investor funds, the complaint states.
Another $7 Million Case
In addition, the defendants told existing and potential clients that the firm’s proprietary trading model was profitable, and they would earn 8 percent per year on their investment plus 50 percent of any trading profits. In reality, Slobodnik had falsified the documents to conceal the fact that he misappropriated much of the money, and was also responsible for approximately $249,000 in trading losses.
In a related pending case, the same judge ordered Carter, how worked as a trader at Blue Guru, to collectively pay nearly $7.0 million in restitution, disgorgement and civil penalties.