Miami, FL – John Pakel, of Boynton Beach, Florida, and his company, Sentry Asset Group, LLC, were hit with a $378,767 penalty and trading ban after being found liable for precious metals fraud, the Commodity Futures Trading Commission (CFTC) announced November 18, 2015. The case was heard in U.S. District Court for the Southern District of Florida before Judge Beth Bloom.
Pakel, owner, manager, and controlling person of Sentry Asset Management, LLC (SAG) of Boca Raton, Florida, solicited retail customers via telephone between March 2012 and July 2013, offering leveraged, margined, or financed precious metals transactions. The CFTC found that SAG collected approximately $1.1 million from customers and earned at least $278,767 in commissions and fees.
The transactions were illegal under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which requires actual delivery of the metal within 28 days for leveraged, margined, or financed transactions. However, the CFTC determined that no metal was ever delivered to customers.
SAG executed these illegal transactions through other firms, including Lloyds Commodities, LLC, Hunter Wise, LLC, and AmeriFirst Management LLC. The CFTC had previously brought enforcement actions against these companies, alleging similar illegal practices. AmeriFirst was found liable for fraud in 2013, while Lloyds was ordered to pay over $5 million in restitution and penalties in 2014. Hunter Wise was found to have no actual metal to deliver to customers and violated registration requirements.
As part of the consent order, Pakel and SAG were jointly ordered to pay a $100,000 civil monetary penalty and $278,767 in restitution. They are also permanently banned from engaging in any future trading or registration activities related to commodity futures.
Source: CFTC.gov
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