Gregory L. Gramalegui of Vail, Colorado, has been ordered to pay over $1.9 million in penalties and disgorgement for defrauding customers, making false statements, and violating a prior CFTC order, a Colorado federal court ruled on October 3, 2018.
The Commodity Futures Trading Commission (CFTC) brought the federal enforcement action against Gramalegui, who operated under the name Emini Trading School. The court found that Gramalegui engaged in a years-long scheme to fraudulently market a futures trading system and an advisory service that did not deliver on their promises. He also failed to provide required disclosures to clients.
Judge Robert E. Blackburn of the U.S. District Court for the District of Colorado, in a 73-page opinion following a two-day bench trial, determined that Gramalegui’s actions constituted fraud. This wasn’t his first offense; the court noted violations of a prior CFTC order from 2001 regarding deceptive trading systems.
In a first-of-its-kind ruling, the court also found that Gramalegui repeatedly made false statements to the CFTC during their investigation. The initial enforcement action was launched on October 19, 2015.
The court ordered Gramalegui to pay a $1,442,070.51 civil monetary penalty and disgorge $480,690.17 in ill-gotten gains. He has also been permanently banned from trading and registering with the CFTC, and is enjoined from further violations of the Commodity Exchange Act and CFTC Regulations.
“The CFTC’s case and this court’s decision make clear that recidivists will be caught and punished and that lying to the CFTC is a grave offense meriting a serious penalty,” said James McDonald, CFTC Director of Enforcement. “This case also shows, yet again, the CFTC’s readiness to prove its case at trial.”
The CFTC cautions that victims may not recover all lost funds, as wrongdoers may lack sufficient assets. The agency says it will continue to pursue accountability for those who harm commodity trading customers.
Source: CFTC.gov
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