Miami resident Eduardo Barale has been penalized by the U.S. Commodity Futures Trading Commission (CFTC) for his role in a fraudulent commodity futures and options scheme, the agency announced September 27, 2007. The charges stem from a complaint filed in October 2004 alleging deceptive sales practices at Brickell Key Financial, LLC, where Barale served as founder and CEO.
According to the CFTC, between June 2002 and April 2003, Brickell employees—including Barale—fraudulently solicited customers to invest in commodity futures contracts and options. Salespersons allegedly made false and misleading claims about potential profits, specifically referencing the anticipated Iraqi war and seasonal demands for heating oil and crude oil. These claims falsely suggested investors could double their money, exaggerating the likelihood of profit given established market factors.
The court found Barale liable for Brickell’s violations as a controlling person and for failing to implement a compliance program to prevent fraudulent statements by employees. Brickell reportedly lacked a compliance manual or any written procedures for customer solicitation and complaint handling.
The consent order against Barale requires him to pay $70,000 in restitution to affected customers and a civil monetary penalty of $120,000. He is also prohibited from applying for registration with the CFTC and from engaging in futures or options transactions for himself or others for five years, contingent upon full payment of the restitution and penalty.
Michael Mesa, another former Brickell employee, was also penalized with a $25,000 restitution order and a $120,000 civil monetary penalty on September 18, 2007. He is permanently barred from applying for CFTC registration and participating in commodity-related activities. Malini Nersian, also a former Brickell employee, received a $10,000 civil monetary penalty and a permanent ban from commodity-related activities on July 27, 2007.
The case, CFTC v. Brickell Key Financial, LLC, et al, Civil Action No. 04-22549, was heard in the U.S. District Court for the Southern District of Florida.
Source: CFTC.gov
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