CFTC ANNOUNCES FRAUD ACTIONS

The following excerpt is from the CFTC website:
“The Division’s mission to protect market participants from fraud is reflected by the 55 fraud actions filed in fiscal year 2011 alone, and by the numerous federal court orders obtained by the Division against more than 75 defendants, imposing civil monetary penalties and restitution and disgorgement obligations. In one notable fraud case, CFTC vs Walsh, et al, the Court ordered an initial distribution and return of approximately $792 million to commodity pool investors stemming from an alleged $1.3 billion Ponzi scheme that was the subject of CFTC and Securities and Exchange Commission (SEC) charges in a prior fiscal year.
The Division also took action against so-called gatekeepers, charging an accounting firm and two of its partners in two separate cases, for failing to apply generally accepted auditing standards (GAAS) when conducting audits of futures commission merchants that had produced misstated financial statements. See In the Matter of G. Victor Johnson II, McGladrey & Pullen, LLP and Altshuler, Melvoin & Glasser, LLP, CFTC Docket No. 11-01 (October 4, 2010 ) and In the Matter of David Shane and McGladrey & Pullen, LLP, CFTC Docket No. 11-23 (September 22, 2011).
Foreign Exchange Currency (Forex) EnforcementThe Division of Enforcement filed 23 actions enforcing new regulations that resulted from the Dodd-Frank Act, and that require foreign exchange dealers and introducing brokers to register with the Commission. Separately, and as part of the Division’s prosecution of retail forex fraud, the Division prevailed in a federal jury trial in the United States District Court for the Middle District of Florida, which imposed more than $17 million in sanctions and other relief against Capital Blu Management, LLC and several other defendants.
Cooperating with Law Enforcement PartnersThe Division of Enforcement continues to actively engage in cooperative enforcement with federal and state criminal and civil law enforcement authorities. During FY 2011, more than 70 indictments and convictions were obtained in criminal cases related to CFTC enforcement actions.
The Division also engages in cooperative enforcement with international authorities in a wide range of matters from retail fraud to market manipulation. Requests and referrals to and from foreign authorities continued to grow during FY 2011. The Division handled over 530 international requests and referrals, an approximate 20 percent increase over FY 2010. “