Miramar, FL – December 6, 2007 – Cedric Stanton has been slapped with a hefty penalty following a default judgment by the U.S. District Court for the Eastern District of Michigan. The Commodity Futures Trading Commission (CFTC) brought the case against Stanton, along with Millenium Trading Group, LLC (MTG) and Worldwide Clearing, LLC, alleging fraud related to foreign currency (forex) futures and options trading.
The court found Stanton, MTG, and Worldwide jointly and severally liable for $452,516 in restitution to defrauded customers, and Stanton and MTG jointly liable for an additional $49,000. Beyond restitution, Stanton was ordered to pay a $3,360,000 civil penalty, while MTG faces a $3,360,000 penalty and Worldwide a $3,240,000 penalty. The judgment also permanently bans all three defendants from trading on CFTC-regulated markets and engaging in any activities requiring CFTC registration.
The CFTC initially filed a complaint on April 10, 2007, detailing how, between April 2004 and October 2005, MTG’s sales force, led by Stanton, allegedly misled the public into opening forex trading accounts. The complaint alleges misrepresentations were made regarding potential profits, the risks involved, MTG’s own trading performance, and the commissions charged to customers.
Specifically, the court found that Stanton and MTG made false promises to customers, including claims of $100,000 annual returns on a $6,000 investment and potential million-dollar gains from a $200,000 investment within weeks. Customers were falsely assured their investments were safe and incapable of losing money, while the majority actually experienced losses during the relevant period.
In one egregious instance, Stanton and MTG accepted $49,000 from a customer for a forex account but never actually established the account. Instead, they allegedly misappropriated the funds for their own use, falsely reporting to the customer that their $6,000 investment had grown to $50,000. The court also determined that MTG acted as an agent of Worldwide, making Worldwide liable for the fraudulent actions.
Source: CFTC.gov
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