New York, NY – March 22, 2007 – The Commodity Futures Trading Commission (CFTC) today announced enforcement actions against multiple entities and individuals for allegedly defrauding customers through phony commodity futures and options websites. The case, filed in the U.S. District Court for the Southern District of New York, targets a network of companies accused of misrepresenting their services and locations to attract investors.
The CFTC alleges that New York Options Exchange (NYOEX), Tahoe Futures, International Energy Exchange (INTENX), Vitol Capital Management, New York Petroleum Option Exchange (NYPOE), HPR Commodities, American Futures and Options Exchange (AFOEX), Metro Financials, and American Futures and Options Trading Commission (AFOTC) engaged in fraudulent solicitations. Customers were lured with false promises, believing they were trading on legitimate U.S.-based exchanges through registered brokers.
Specifically, the complaints detail that the defendants falsely claimed to be registered futures exchanges (NYOEX, INTENX, NYPOE, and AFOEX) and legitimate brokers (Tahoe, Vitol, HPR, and Metro). They allegedly used U.S. area code fax numbers and fabricated membership lists to create the illusion of a legitimate U.S. operation. Furthermore, Metro directed customers to a fictitious regulatory body, AFOTC, to enhance credibility.
The CFTC is seeking a restraining order, permanent injunction, restitution for customer losses, and monetary penalties against the defendants for violations of the Commodity Exchange Act. The agency emphasized that these companies are distinct from similarly named, legitimate businesses operating in the U.S.
The CFTC also issued a consumer advisory warning investors to exercise caution when encountering sophisticated-looking websites offering commodity futures and options contracts. The agency urges thorough due diligence before wiring funds to foreign entities. The case received assistance from international regulators including those in Australia, Germany, Hong Kong, and Switzerland, as well as the New York Mercantile Exchange and the U.S. Securities and Exchange Commission.
David Oakland of the CFTC’s Division of Enforcement is leading the case, alongside Philip Rix, Nathan Ploener, Manal Sultan, Lenel Hickson, and Stephen J. Obie.
Source: CFTC.gov
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