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.
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.
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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.