George Athanasatos, of Wantagh, New York, along with Madison Dean, Inc. and Laurence Dodge, are facing charges of fraud following a civil enforcement action filed by the U.S. Commodity Futures Trading Commission (CFTC) on May 8, 2012, in the U.S. District Court for the Eastern District of New York. The defendants are accused of fraudulently soliciting approximately 19 individuals to invest around $415,000 in managed forex trading accounts between December 2008 and July 2010.
The CFTC alleges that Madison Dean, Athanasatos, and Dodge misrepresented key facts about their company to attract investors. These misrepresentations included falsely claiming the firm had been established since 1998, that their clientele consisted of high-net-worth individuals and institutional clients, and that professional money managers were handling customer accounts. In reality, Madison Dean was founded in December 2008, its customers did not fit the described profile, and Athanasatos, along with Dodge and Athanasatos’ mother – none of whom were professional traders – were responsible for managing customer funds.
According to the complaint, customers suffered losses of approximately $250,000 due to the firm’s poor trading performance. After collecting roughly $112,000 in commissions and fees over a little more than a year, Madison Dean abruptly ceased operations, leaving customers with no means of contact or recourse. None of the defendants were registered with the CFTC at the time of the alleged offenses.
The CFTC is seeking civil monetary penalties, restitution for losses incurred, disgorgement of any ill-gotten gains, trading and registration bans, and both preliminary and permanent injunctions to prevent further violations of the Commodity Exchange Act. The agency received assistance from the United Kingdom Financial Services Authority during the investigation. The case is being pursued by CFTC staff members Alan I. Edelman, James H. Holl, III, Michelle Bougas, Gretchen L. Lowe, and Vincent McGonagle.
Source: CFTC.gov
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