LEBANON, TN – Gregory M. Schneider of Bellville, Ohio, has been ordered to pay $140,000 in penalties for making false statements to the National Futures Association (NFA), according to a federal court order obtained by the U.S. Commodity Futures Trading Commission (CFTC). The order, entered on August 28, 2012, stems from a complaint filed on August 8, 2011, alleging Schneider and his firm, Blue Sky Capital Management Corp., intentionally misled NFA auditors.
Schneider, the principal of Blue Sky, and the company were found to have jointly and severally violated CFTC regulations by providing false information during a 2008 NFA audit. Specifically, they misrepresented the start date of account management, the number of customer accounts, and the total equity under management. They claimed Blue Sky began managing accounts in 2008, with only 10 accounts totaling $20,000 in equity, and reported receiving no customer complaints.
However, the CFTC investigation revealed that Blue Sky had been managing approximately 80 customer accounts with $1.2 million in equity as early as 2007. Furthermore, a customer had lodged a complaint regarding unauthorized trading activity *before* and *during* the NFA audit – information Schneider and Blue Sky deliberately concealed.
Judge John T. Nixon of the U.S. District Court for the Middle District of Tennessee issued a permanent injunction against both Schneider and Blue Sky, prohibiting them from further violations of the Commodity Exchange Act. In addition to the $140,000 penalty, Schneider and Blue Sky are banned from engaging in any future trading or registration activities within the commodities market. The CFTC noted the assistance of the NFA in bringing the case to resolution.
The case was led by CFTC Division of Enforcement staff including Stephanie Reinhart, Joseph Konizeski, Judith McCorkle, Scott Williamson, Rosemary Hollinger, and Richard Wagner. The announcement was made on September 6, 2012.
Source: CFTC.gov
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