US Watchdog Secures Court Order Against Fraudulent Commodity Pool Scheme ‎

by Aziz Abdel-Qader
  • CFTC receivs court orders to impose ‎trading bans and penalties of nearly $3.0 million against a commodity ‎pool operator.
US Watchdog Secures Court Order Against Fraudulent Commodity Pool Scheme ‎
Finance Magnates
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The U.S. Commodity Futures Trading Commission (CFTC) reported today that a Florida court has issued a default final judgment order against Dante S. ‎Giovannetti and his companies Emini Experts, LLC (Emini) and Capital Trading ‎Concepts LLC (Capital Trading) for defrauding clients in connection with the ‎operation of a commodity trading pool, according to a CFTC statement.‎

The charges raised against the defendants arises from a CFTC Complaint filed on ‎October 30, 2014. Details of the court order explain that the defendants ‎fraudulently solicited and misappropriated funds from commodity pool ‎participants. The prder further finds that the defendants concealed the fraud by ‎issuing false account statements to investors regarding the profitability of the ‎trading, improperly co-mingled investor funds, and failed to register as a ‎commodity pool operator.

In addition, the judge Paul G. Byron of the U.S. District ‎Court for the Middle District of Florida (Orlando Division) described Giovannetti, ‎Emini, and Capital Trading as liable to those violations, and additionally finds that ‎Giovannetti and Emini concealed material facts from the National Futures ‎Association. The order also finds that Capital Futures received at least $143,358 ‎of investor funds.‎

Monetary Penalties

More specifically, the court’s order required Giovannetti, Emini, and Capital Trading ‎jointly to pay $663,975 to defrauded customers as restitution for their losses and ‎jointly to pay a $1,991,926 civil monetary penalty. The order also separately ‎imposes jointly against Emini and Giovannetti an additional $140,000 civil monetary ‎penalty. Capital Futures LLC, another ‎company owned by Giovannetti, was also ordered to disgorge $143,358 of ill-gotten gains.

Furthermore, the court imposed permanent trading bans against all defendants and ‎prohibits them from engaging in any commodity-related activity and from registering ‎with the CFTC.‎

Unfortunately for the victims of Giovannetti’s companies and its prior operations, restitution ‎orders are not guaranteed to result in the recovery of damages or money lost, as ‎Giovannetti, and by extension Capital Trading and Emini, may not possess adequate funds. ‎

Further Criminal Actions

Separately, the court sentenced Giovannetti to prison for 63 months in a related ‎criminal action entitled US v. Giovannetti, and ordered restitution in the same ‎amounts as in the CFTC’s action. Any satisfaction of the criminal judgment will be ‎credited against the restitution ordered.‎

The events highlight the extent of fraud taking place under the name of ‎commodity pools, often trading in commodity futures and off-Exchange foreign currency, in addition to the ‎widespread use of fraudulent account performance being used to solicit clients.

The CFTC has been actively targeting firms and individuals involved in illegal ‎trading and fraudulent activity. The US watchdog has issued several customer protection fraud advisories that provide the warning signs of ‎fraud, including the Commodity Pool Fraud Advisory, which warns customers about a type of fraud that involves individuals and firms, often unregistered, offering investments in commodity pools.‎

A number of domestic agencies were involved in the case including; U.S. Attorney’s National ‎Futures Association, the United States Attorney’s Office for the Middle District of Florida, the United States Marshals Service, Orlando Division, and the Florida Office of Financial Regulation , which the CFTC thanked for ‎their assistance in its statement.

The U.S. Commodity Futures Trading Commission (CFTC) reported today that a Florida court has issued a default final judgment order against Dante S. ‎Giovannetti and his companies Emini Experts, LLC (Emini) and Capital Trading ‎Concepts LLC (Capital Trading) for defrauding clients in connection with the ‎operation of a commodity trading pool, according to a CFTC statement.‎

The charges raised against the defendants arises from a CFTC Complaint filed on ‎October 30, 2014. Details of the court order explain that the defendants ‎fraudulently solicited and misappropriated funds from commodity pool ‎participants. The prder further finds that the defendants concealed the fraud by ‎issuing false account statements to investors regarding the profitability of the ‎trading, improperly co-mingled investor funds, and failed to register as a ‎commodity pool operator.

In addition, the judge Paul G. Byron of the U.S. District ‎Court for the Middle District of Florida (Orlando Division) described Giovannetti, ‎Emini, and Capital Trading as liable to those violations, and additionally finds that ‎Giovannetti and Emini concealed material facts from the National Futures ‎Association. The order also finds that Capital Futures received at least $143,358 ‎of investor funds.‎

Monetary Penalties

More specifically, the court’s order required Giovannetti, Emini, and Capital Trading ‎jointly to pay $663,975 to defrauded customers as restitution for their losses and ‎jointly to pay a $1,991,926 civil monetary penalty. The order also separately ‎imposes jointly against Emini and Giovannetti an additional $140,000 civil monetary ‎penalty. Capital Futures LLC, another ‎company owned by Giovannetti, was also ordered to disgorge $143,358 of ill-gotten gains.

Furthermore, the court imposed permanent trading bans against all defendants and ‎prohibits them from engaging in any commodity-related activity and from registering ‎with the CFTC.‎

Unfortunately for the victims of Giovannetti’s companies and its prior operations, restitution ‎orders are not guaranteed to result in the recovery of damages or money lost, as ‎Giovannetti, and by extension Capital Trading and Emini, may not possess adequate funds. ‎

Further Criminal Actions

Separately, the court sentenced Giovannetti to prison for 63 months in a related ‎criminal action entitled US v. Giovannetti, and ordered restitution in the same ‎amounts as in the CFTC’s action. Any satisfaction of the criminal judgment will be ‎credited against the restitution ordered.‎

The events highlight the extent of fraud taking place under the name of ‎commodity pools, often trading in commodity futures and off-Exchange foreign currency, in addition to the ‎widespread use of fraudulent account performance being used to solicit clients.

The CFTC has been actively targeting firms and individuals involved in illegal ‎trading and fraudulent activity. The US watchdog has issued several customer protection fraud advisories that provide the warning signs of ‎fraud, including the Commodity Pool Fraud Advisory, which warns customers about a type of fraud that involves individuals and firms, often unregistered, offering investments in commodity pools.‎

A number of domestic agencies were involved in the case including; U.S. Attorney’s National ‎Futures Association, the United States Attorney’s Office for the Middle District of Florida, the United States Marshals Service, Orlando Division, and the Florida Office of Financial Regulation , which the CFTC thanked for ‎their assistance in its statement.

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