Miami, FL – December 9, 2008 – Benji Dayan, along with eight other individuals and entities, has been ordered to pay over $12 million in restitution and penalties to settle fraud charges brought by the U.S. Commodity Futures Trading Commission (CFTC). The case, CFTC v. The Liberty Mutual Group, et al., centered on an illegal off-exchange foreign currency (forex) options scheme.
U.S. Magistrate Judge Edwin G. Torres of the Southern District of Florida entered consent orders on December 4, 2008, outlining the penalties. The Addison Enterprise – comprised of The Liberty Mutual Group, Inc., Addison Financial Group, Inc., Addison Management Group, Inc., Hamlin Mercer Group, Inc., and Colfax Management Group, Inc. – will pay $3,329,524.50 in penalties. Forefront Investment Limited Partnership will pay $1,065,459.61, while Dayan, Todd Guthrie, and Alan Lerner will each pay $260,000.
The court orders mandate a total of $7,081,036.63 in restitution to investors who lost approximately 93% of their $7,611,306.46 investment. The scheme, operating between February 2005 and June 2006, fraudulently solicited retail customers into off-exchange forex options transactions with Forefront Investment Limited Partnership acting as the counterparty.
In addition to the financial penalties, Forefront Investments Limited Partnership and the Addison Enterprise firms are permanently barred from participating in any commodity-related activity. Dayan, Guthrie, and Lerner are permanently prohibited from trading commodities on behalf of others or soliciting funds for commodity trading. All defendants are also barred from registering with the CFTC or associating with any registered entity.
Authorities allege Lerner acted as the controlling person of the Addison Enterprise, while Dayan and Guthrie held similar roles at Forefront Investments Limited Partnership. The Florida Office of Financial Regulation provided assistance in the investigation.
Source: CFTC.gov
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