Brian S. Ekasala, of Lake Worth, Florida, has been charged with precious metals fraud by the U.S. Commodity Futures Trading Commission (CFTC), the agency announced February 4, 2015. Ekasala, along with his company Midwest Metals Exchange, LLC, allegedly engaged in illegal, off-exchange precious metals transactions.
The CFTC order requires Ekasala and Midwest to jointly pay $322,852.71 in restitution and a $200,000 civil monetary penalty. Both Ekasala and Midwest are permanently banned from trading and registration, and are ordered to cease violations of Section 4(a) of the Commodity Exchange Act.
According to the CFTC, between July 2011 and March 2013, Midwest solicited retail customers to buy and sell precious metals through Hunter Wise Commodities, LLC. Telemarketers allegedly told customers they could purchase metals with a 30 percent deposit and a 70 percent loan, including interest, commission, and a markup on the total metal value. The CFTC found that neither Midwest nor Hunter Wise ever bought, sold, loaned, stored, or transferred any physical metals, nor delivered any metals to customers. The transactions were deemed illegal because they weren’t executed on a registered exchange.
The CFTC previously filed suit against Midwest’s clearing firm, Hunter Wise, in federal court in Florida on December 5, 2012, alleging illegal transactions, fraud, and other violations. A preliminary injunction was granted on February 25, 2013, freezing the firm’s assets and appointing a corporate monitor.
The CFTC stated that Ekasala owned and operated Midwest, with complete control over its daily operations, including the hiring and supervision of telemarketers. The agency cautions victims that restitution may not fully recover lost funds, as wrongdoers may lack sufficient assets. The CFTC encourages anyone with information about commodity trading violations to contact them via their toll-free hotline or online complaint form.
Michael Amakor, Todd Kelly, Peter M. Haas, and Paul G. Hayeck of the CFTC Division of Enforcement were responsible for this case.
Source: CFTC.gov
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