WASHINGTON, D.C. – Coyt E. Murray, of Tega Cay, South Carolina, has been ordered to pay over $30.4 million in sanctions for perpetrating a multi-million dollar Ponzi scheme, the U.S. Commodity Futures Trading Commission (CFTC) announced on July 23, 2007. The sanctions stem from a consent order entered by U.S. District Court Judge Robert B. Kugler of the District of New Jersey on June 28, 2007.
Murray, along with four companies he controlled – Tech Traders, Inc., Tech Traders, Ltd., Magnum Investments, Ltd., and Magnum Capital Investments, Ltd. – fraudulently solicited over $47 million from investors between 1998 and April 1, 2004. Investors were lured with promises of double-digit gains generated through commodity futures trading, when in reality the operation was losing millions.
The CFTC complaint, initially filed in April 2004 and amended in August 2004, alleged that Murray operated a “super fund” known as Tech Traders. Evidence showed that Tech Traders and Magnum lost over $10 million trading commodity interests.
Further compounding the fraud, Murray engaged J. Vernon Abernethy, a certified public accountant, to verify Tech Traders’ trading results in 2001. However, Murray provided Abernethy with incomplete and selectively chosen data, leading Abernethy to falsely report consistent profitability to investors. Abernethy was previously ordered to pay $5 million in restitution and a $300,000 penalty in a related case.
The order mandates a restitution award of $17,871,012 and a civil monetary penalty of $11,378,735 against Murray and his companies. The Tech Traders entities are jointly liable for $15,117,523 in restitution and $7,558,761 in penalties, while the Magnum entities are jointly liable for $2,753,489 in restitution and $1,376,744 in penalties. Murray is also personally liable for the full restitution amount and an additional $2,443,230 in penalties, plus $1,221,615 in disgorgement of ill-gotten gains.
All defendants are permanently prohibited from engaging in any commodity-related activity. In a separate criminal action, Murray has already pleaded guilty to charges of commodities fraud, mail fraud, and wire fraud brought by the United States Attorney for the Western District of North Carolina and is currently awaiting sentencing.
Source: CFTC.gov
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