Miami, FL – February 5, 2014 – James Burbage and Frank Gaudino, Florida residents, were hit with a hefty penalty and permanent ban from the commodities market following a judgment entered by Judge Donald M. Middlebrooks of the U.S. District Court for the Southern District of Florida. The ruling stems from their involvement in a multi-million dollar precious metals scheme connected to Hunter Wise Commodities, LLC.
Burbage and Gaudino, along with their companies Lloyds Commodities, LLC, Lloyds Commodities Credit Company, LLC, and Lloyds Services, LLC, were found to have facilitated a fraudulent operation. The court order requires the Lloyds Defendants to pay a combined civil monetary penalty of $2,215,000. Individually, Burbage must pay $423,000 in penalties and $423,000 in restitution, while Gaudino is responsible for $263,000 in penalties and $263,000 in restitution. The restitution funds, totaling $1,476,690, will be managed by Court-appointed Special Monitor Melanie Damian and designated for the “Hunter Wise Settlement/Restitution Fund.”
According to the court findings, from July 16, 2011, to February 25, 2013, the Lloyds Defendants presented themselves as a leading precious metals wholesaler, dealing in gold, silver, platinum, palladium, and copper. They acted as intermediaries, accepting leveraged orders and funds from customers solicited by telemarketing firms and forwarding them to Hunter Wise. The defendants also actively recruited these telemarketing firms until a preliminary injunction was issued against Hunter Wise and related parties in February 2013.
The CFTC determined that Burbage, Gaudino, and their companies violated the Commodity Exchange Act by executing and dealing in retail commodity transactions without adhering to regulations requiring such transactions to be conducted on a regulated exchange. This effectively bypassed crucial oversight and protections for customers.
The CFTC’s investigation and litigation are ongoing against Hunter Wise and its principals, as well as the telemarketing firms involved in the scheme. The Florida Office of Financial Regulation provided assistance in the case. The CFTC staff involved in the investigation included Carlin Metzger, Heather Johnson, Brigitte Weyls, Jeff Le Riche, Peter Riggs, Thaddeus Glotfelty, Joseph Konizeski, Scott Williamson, Rosemary Hollinger, and Richard B. Wagner.
Source: CFTC.gov
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