A California man and his company have been slapped with hefty penalties and ordered to pay over $1.1 million in restitution after a federal court found them guilty of commodity fraud. Gerard Suite, who operated under multiple aliases including Rawle Gerard Suite, Jerry Suite, and Jerry Snead, and his firm, STA Opus NR LLC, were the subjects of a Default Judgment Order issued by the U.S. District Court for the Central District of California on November 13, 2017.
The CFTC initially filed a complaint against Suite, STA Opus, and Frank Collins on August 8, 2016, alleging fraud, misappropriation, and failure to register with the agency. The court found that from at least January 2013 through May 6, 2016 – when Suite was arrested by the FBI – Suite and STA Opus fraudulently solicited customers by falsely claiming positive returns on their commodity pool. In reality, the firm’s trading accounts had lost nearly all committed funds.
The court also determined that Suite and STA Opus misappropriated $1,127,855 of investor money and concealed this activity through false account statements. STA Opus was operating as an unregistered commodity pool operator, and Suite was acting as an unregistered associated person during the fraudulent solicitation. The Default Order mandates $1,127,855 in restitution to defrauded pool participants and $3,383,565 in civil monetary penalties.
Frank Collins also faced repercussions for his involvement. A Consent Order, entered September 13, 2017, requires Collins to pay $50,000 in restitution and a $50,000 civil monetary penalty. The court found Collins aided Suite in launching STA Opus in late 2012, attracting roughly $1.6 million in investments from over 30 individuals. Collins then misappropriated at least $50,000 of those funds for personal gain.
In addition to the financial penalties, Suite and Collins are permanently banned from violating anti-fraud provisions of the Commodity Exchange Act and CFTC Regulations, as well as from engaging in any further trading or solicitation activities. The CFTC cautioned that recovering funds from the defendants may prove difficult, as they may lack sufficient assets. The investigation was conducted with the assistance of the Federal Bureau of Investigation and the U.S. Attorney’s Office for the Central District of California.
Source: CFTC.gov
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