BOCA RATON, FL – February 5, 2015 – Isaiah Goldman and Brock Catronio of Delray Beach, Florida, are facing significant penalties following a Commodity Futures Trading Commission (CFTC) enforcement action. The CFTC issued an order today charging Goldman and Catronio, along with their companies, Paramount Metals Exchange, LLC and Paramount Credit, LLC, with engaging in fraudulent, off-exchange precious metals transactions.
The order mandates that Goldman, Catronio, and Paramount collectively pay $1,595,946 in restitution to affected customers and a $1 million civil monetary penalty. Additionally, all three parties are permanently banned from registering with and trading on any CFTC-regulated exchange.
According to the CFTC, from December 2011 through February 2013, Goldman, Catronio, and Paramount falsely advertised the sale and transfer of physical precious metals to retail customers. They claimed to arrange for storage in independent depositories, leading customers to believe they owned the metal outright. However, the CFTC found that the transactions were actually financed purchases, where customers only paid a portion of the price and took out loans for the remainder.
Customers paid a total of $3,306,032, but ultimately lost $1,595,946 due to trading losses, commissions, interest charges, and other fees levied by Paramount and another unnamed company. Goldman, Catronio, and Paramount personally profited $853,279 from these commissions and fees. The CFTC determined that these actions constituted illegal, off-exchange transactions and fraud, violating the Commodity Exchange Act.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 prohibits these types of financed transactions unless actual delivery of the metal occurs within 28 days. The CFTC found that Paramount’s transactions, executed through Hunter Wise Commodities LLC, failed to deliver the metal to customers as promised. Furthermore, these transactions were not executed on a CFTC-approved exchange, a further violation of regulations.
The CFTC cautions that customers may not fully recover their losses, as the defendants may lack sufficient assets. The agency remains committed to protecting customers and holding wrongdoers accountable. The case was led by CFTC staff members Susan B. Padove, Heather Johnson, Elizabeth M. Streit, Scott Williamson, and Rosemary Hollinger.
Source: CFTC.gov
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