The U.S. Commodity Futures Trading Commission (CFTC) has today announced that it has obtained a federal court consent Order of permanent injunction against Laurence Dodge of Fresh Meadows, New York, a principal of Madison Dean, Inc. of Wantagh, New York.
The Order requires Mr. Dodge to pay nearly $250,000 in restitution to customers and a further $150,000 civil monetary penalty. The Order also imposes permanent trading and registration bans against Dodge and prohibits him from violating the anti-fraud provisions of the Commodity Exchange Act, as charged.
The Order, entered on June 20, 2013, by Judge Joseph F. Bianco of the U.S. District Court for the Eastern District of New York, stems from a CFTC Complaint filed on May 8, 2012, charging Dodge, Madison Dean, and another Madison Dean principal, George Athanasatos, also of Wantagh, with fraudulently soliciting approximately 19 persons to invest approximately $415,000 in managed trading accounts to trade off-exchange foreign currency contracts on a leverage or margined basis.
This particular order finds that Dodge misrepresented and omitted material facts about the history of Madison Dean, the nature of Madison Dean’s clients, the background and qualifications of Madison Dean’s employees, and the performance record of Madison Dean for the purpose of creating a false impression that Madison Dean was a well-established and successful company.
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According to the regulator, the investigation and ensuing court decision also finds that after being in operation for a little over one year – during which time customers lost approximately $250,000 and Madison Dean collected approximately $112,000 in commissions and fees – Madison Dean shut down its operation with no notice to its customers and no way for those customers to contact the company or anyone associated with it.
This is not the first time that the firm has fallen foul of the authorities, the firm previously, on March 8, 2012, was issued with a consent Order of permanent injunction against Madison Dean and Athanasatos, which required them jointly to pay nearly $250,000 in restitution to defrauded customers and imposed a $1 million civil monetary penalty on Madison Dean and a penalty of $210,000 on Athanasatos. The Order also imposes permanent trading and registration bans against them and prohibits them from violating the anti-fraud provisions of the Commodity Exchange Act, as charged.
With the entry of Order against Dodge, the CFTC’s litigation is concluded.
The CFTC has extended its appreciation for the assistance of the United Kingdom’s Financial Services Authority in this matter