The U.S. Commodity Futures Trading Commission (CFTC) has charged two Californian individuals and their company STA Opus NR LLC with fraud and misappropriation of funds. Frank Collins and Gerard Suite both allegedly orchestrated a commodity pool scheme, through which they solicited at least $1.6 million from at least 30 clients.
According to the enforcement action filed by the US watchdog, the duo has misappropriated at least $1.25 million in client funds. According to the documents filed by the CFTC, the defendants issued false account statements to clients, effectively concealing their fraud and claiming to their clients that STA Opus was a registered Commodity Pool Operator.
Liquidity Constraints in 2021 – What is the Best Path Forward?Go to article >>
Collins & Suite presented false returns to their victims for the period between January 2013 and the present. 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.
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.
One Fraudster Already Fined $2.5 million
Suite did not disclose to clients of the firm that he was previously involved in another case of unregistered investment advisory. He has already been ordered to pay $2.5 million in restitution and fines. He was arrested back in May.
While committing his previous offense, Suite sold investment contracts, promissory notes, company shares and investment units to a number of investors using different company names. His actions have led to a trial, however despite the fact that he hasn’t returned the funds to his previous victims he was still able to participate in the organization of this new commodity pool fraud.