FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Final Judgement Entered Against Former Sales Agent of Massachusetts Company
The Securities and Exchange Commission announced today that on April 5, 2013, the U.S. District Court for the District of Massachusetts entered final judgment by consent against David Affeldt, a former sales agent of Massachusetts-based Inofin, Inc., in a civil injunctive action filed by the Commission on April 14, 2011. Among other things, the judgment orders Affeldt to pay a total of over $200,000 in disgorgement of ill-gotten gains plus pre-judgment interest and a civil penalty.
The Commission’s complaint alleged that Affeldt promoted the offering and sale of unregistered securities, issued by Inofin, a consumer finance company. As alleged in the complaint, Inofin through its former executives Michael J. Cuomo of Plymouth, Massachusetts, Kevin Mann, Sr. of Marshfield, Massachusetts and Melissa George of Duxbury, Massachusetts illegally raised at least $110 million from hundreds of investors in 25 states and the District of Columbia through the sale of unregistered notes. According to the SEC’s complaint, Inofin, along with Cuomo, Mann and George, materially misrepresented how the Company was using investor money and the Company’s financial performance. Along with Affeldt the SEC charged Thomas K. (Kevin) Keough – alleging that they promoted the offering and sale of Inofin’s unregistered securities. Keough’s wife Nancy Keough is named in the complaint as a relief defendant for the purposes of recovering proceeds she received as a result of the violations.
The final judgment as to Affeldt imposed a permanent injunction prohibiting him from violating Sections 15(a) of the Securities Exchange Act of 1934 ("Exchange Act") and Sections 5(a) and 5(c) of the Securities Act of 1933 ("Securities Act").
The final judgment also orders Affeldt to pay disgorgement of $147,039.00, representing profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $12,064.48 for a total of $159,103.48 plus a civil penalty in the amount of $50,000.
The Commission previously obtained final judgments by consent as to Cuomo and Mann which included permanent injunctions prohibiting Cuomo and Mann from violating Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, and Sections 5 and 17(a) of the Securities Act. The SEC’s action remains pending against Inofin, George, and the Keough
FROM: COMMODITY FUTURES TRADING COMMISSION
Federal Court Orders Illinois Resident Brant L. Rushton and his Company, Summit Trading & Capital LLC, to Pay over $4.8 Million for Fraud and other Violations in Commodity Pool Scheme
B. Rushton pled guilty to criminal charges in a parallel federal criminal action and was sentenced to eight years in prison
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) announced today that it obtained a federal court Order requiring Defendants Brant L. Rushton (B. Rushton) and Summit Trading & Capital LLC (Summit) of Champaign, Illinois, to jointly pay approximately $1.6 million in restitution to defrauded pool participants and a civil monetary penalty of approximately $3.2 million. The court’s grant of summary judgment also imposes permanent trading and registration bans against the Defendants and prohibits them from violating the anti-fraud and other provisions of the Commodity Exchange Act and Commission Regulations, as charged.
The Order, entered April 3, 2013, by Judge James E. Shadid of the U.S. District Court for the Central District of Illinois, stems from a CFTC enforcement action filed November 29, 2011 against Summit, B. Rushton and his wife Melissa C. Rushton (M. Rushton), charging them with fraudulent operation of a commodity pool.
The Order finds that B. Rushton and Summit fraudulently solicited and accepted almost $2 million from multiple pool participants for investment in one or more commodity pools that traded futures contracts. The Order specifically finds that in soliciting participants, B. Rushton falsely represented that he was a successful futures trader who generated consistent profits, when, in fact, B. Rushton’s trading resulted in consistent losses that were concealed from pool participants by issuance of false account statements. According to the Order, almost $1.2 million of participant funds was misappropriated by B. Rushton and Summit.
On July 12, 2012, B. Rushton pled guilty to criminal charges in a parallel federal criminal action stemming from the same conduct and will begin serving an eight-year prison sentence later this year. The CFTC’s action is still pending against M. Rushton, the sole remaining Defendant.
The CFTC Division of Enforcement staff members responsible for this action are Daniel Jordan, Michael Loconte, Erica Bodin, Rick Glaser, and Richard Wagner.
FROM: SECURITIES AND EXCHANGE COMISSION
Washington, D.C., April 3, 2013 — The Securities and Exchange Commission today announced a final rule that streamlines the process for rulemaking by clearing agencies that are registered with both the SEC and the Commodity Futures Trading Commission (CFTC).
The final rule amends an interim rule adopted in 2011 that allowed rule changes filed with the SEC by clearing agencies to become effective as soon as they were filed when they were not related primarily to securities futures and did not significantly affect the clearing agencies’ securities clearing operations.
The final rule expands upon the interim rule to permit effectiveness upon filing for rule changes that concern other products that are not securities — including swaps that are neither mixed swaps nor security-based swaps, and forwards that are not security forwards — provided those rule changes do not significantly affect the clearing agencies’ securities clearing operations.
The final rule also includes a new provision that under certain conditions permits temporary immediate effectiveness for rules that significantly affect the clearing agency’s securities-clearing operations when the products themselves are not securities.
The final rule is intended to ensure that clearing agencies registered with both the SEC and the CFTC can avoid unnecessary delays in implementing rule changes that relate primarily to products that are not securities. At the same time, the final rule ensures that such rule changes continue to be filed with the SEC, so that the Commission can carry out its statutory duty to supervise all registered clearing agencies.
The amendments will become effective 60 days after the date of publication of the release in the Federal Register
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
SEC OBTAINS FINAL JUDGMENT AGAINST FORMER CHIEF INVESTMENT OFFICER OF GIBRALTAR ASSET MANAGEMENT GROUP, LLC
On April 3, 2013, the Securities and Exchange Commission announced that the Honorable Robert L. Wilkins, United States District Judge for the District of Columbia, entered final judgment on March 28, 2013, against Maurice G. Taylor to settle charges related to his collaboration in a multi-million dollar Washington-area Ponzi scheme operated through Gibraltar Asset Management Group, LLC and Garfield Taylor, Inc. (GTI):
Maurice G. Taylor, of Bowie, Md., formerly Chief Investment Officer at Gibraltar, without admitting or denying the allegations in the SEC’s complaint, consented to the entry of a Final Judgment permanently enjoining him from violations of Section 17(a) of the Securities Act of 1933 and ordering payment of monetary relief in an amount to be determined by the Court upon motion of the Commission. Following an evidentiary hearing, the Court entered a Final Judgment permanently enjoining Taylor and ordering him to pay $463,785 in disgorgement and $50,682.50 in prejudgment interest, for a total of $514,467.50.
The Commission filed a complaint on November 18, 2011, alleging that Gibraltar’s and GTI’s former Chief Executive Officer, Garfield M. Taylor, operating through GTI and Gibraltar, with the assistance of Maurice G. Taylor, Benjamin C. Dalley, Randolph M. Taylor, William B. Mitchell and Jeffrey A. King, conducted a multi-million Ponzi scheme targeting investors in the Washington D.C. metropolitan area. According to the SEC’s complaint, the defendants defrauded more than $27 million from approximately 130 investors between 2005 and 2010.
The Commission’s case is still pending against the remaining defendants: Garfield M. Taylor, Jeffrey A. King, GTI, Gibraltar, and The King Group, LLC. On September 17, 2012, the Court granted the Commission’s motion for default judgment as to Jeffrey King, GTI, Gibraltar and The King Group, LLC, but has not yet determined the appropriate relief against them. On December 13, 2012, the Court granted the Commission’s motion for summary judgment on all charges sought by the Commission against Garfield Taylor. On March 28, 2013, the Court granted Garfield Taylor’s motion to hold the case against him in abeyance, in light of pending federal criminal charges against him.
FROM: U.S. COMMODITY FUTURES TRADING COMMISSION
Federal Court in Nevada Orders Charles Leroy Timberlake and Trans Global Investments, LLC to Pay $340,000 to Settle Commodity Pool Fraud Charges
Defendants permanently barred from the commodities industry
Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today announced that it obtained a federal court order requiring defendants Trans Global Investments, LLC (Trans Global), a Nevada company and unregistered Commodity Pool Operator (CPO), and its President, Charles Leroy Timberlake, a Texas resident, to pay $200,000 in restitution and a $140,000 civil monetary penalty to settle CFTC charges of commodity pool fraud.
The consent order of permanent injunction, entered on January 14, 2013, by Judge Gloria M. Navarro of the U.S. District Court for the District of Nevada, also imposes permanent trading and registration bans against Timberlake and Trans Global and prohibits them from violating the anti-fraud provisions of the Commodity Exchange Act, as charged.
The CFTC had sued Trans Global and Timberlake, along with CIS Commodities LLC of Henderson, Nev., and its founder and president, Allen Nicholas Ward, of Aspen, Colo., on June 29, 2011 (see Related Link: CFTC Press Release 6068-11). As to Timberlake and Trans Global, the CFTC complaint alleged that Timberlake fraudulently solicited at least $220,000 from five individuals for the purpose of trading commodity futures and option contracts through the Trans Global pool. The complaint further alleged that Timberlake falsely represented that he was registered with the CFTC as a CPO when, in fact, he has never been registered with the CFTC in any capacity. Finally, the complaint also alleged that Timberlake made false representations of material facts and issued false statements to Trans Global pool participants regarding the profitability and value of their investments.
The litigation continues as to the remaining defendants.
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