The US Commodity Futures Trading Commission (CFTC) today received a California federal judge’s blessing to fine bankrupt firm STA Opus and its founder more than US $4.5 million for the firm’s nearly 3-year fraud scheme.
Gerard Suite, the sole owner and operator of the unregulated investment pool, was ordered to pay $1,127,855 in restitution for defrauded participants and $3,383,565 in civil penalties. Today’s fines and penalties come on top of the $2.5 million that Gerard was ordered to pay last year, when he pled guilty to conducting business as an unregistered investment advisor in California.
A supplemental consent order was also entered on November 13 against Frank Collins for “knowingly or recklessly misappropriating at least $50,000 of STA Opus customers’ funds,” the agency said.
Collins & Suite presented false returns to their victims as the accounts which were registered to the company were in fact in the negative, with the defendants losing all of the funds they committed to trading.
ATFX Institutional Business Continues to Expand: Adding a New Prime BrokerGo to article >>
Aside from the misrepresentations on financial statements and the misappropriation of client funds, the duo engaged in wire fraud – they asked clients to send the company void checks and subsequently withdrew funds from the accounts because they knew their account numbers and bank routing information.
The judge Andrew Guilford from the US District Court for the Central District of California has also imposed a lifetime trading ban on the company owner, who is known by numerous aliases, including Rawle Gerard Suite, Jerry Suite, and Jerry Snead.
The decision concludes a successful effort by the CFTC, which filed a civil complaint against Suite and STA Opus in 2016 alleging that they operated phoney commodity pools, to stop the fraud and return as much money as possible to defrauded investors, as well as to bring the wrongdoers to justice.
The complaint alleged that from January 2013 through May 2016 Gerard concealed about $1.3 million in commodity futures trading losses by issuing false account statements showing highly profitable results.
Gerard also allegedly misappropriated the assets of STA Opus’ three commodity futures trading accounts under his control and accepted inflated management and incentive fees for his fraudulent operation of the funds.