BOCA RATON, FL – Lawrence Scott Spain, a resident of Boca Raton, Florida, has been permanently banned from trading and soliciting after being found guilty of precious metals fraud, the Commodity Futures Trading Commission (CFTC) announced August 7, 2014. U.S. District Judge Beth Bloom of the Southern District of Florida issued a Consent Order on August 4, 2014, outlining the penalties.
Spain, operating through his company Palm Beach Capital LLC (PBC), engaged in illegal, off-exchange transactions involving precious metals with retail customers. The CFTC initially filed a complaint on May 13, 2014, alleging that PBC offered leveraged, margined, or financed precious metals transactions – a practice illegal without actual delivery of the commodity within 28 days, as mandated by the Dodd-Frank Act of 2010. The court found that no such deliveries were ever made.
Between July 2011 and August 2012, Spain and PBC allegedly solicited customers via telephone and their website to participate in these risky transactions involving gold, silver, platinum, and palladium. Approximately 39 customers invested at least $1.35 million, resulting in losses of at least $1.25 million due to trading losses, commissions, and fees. PBC reportedly received $526,960 in commissions and fees from these transactions.
The Consent Order requires Spain and PBC, jointly and severally, to pay $526,960 in restitution to the affected customers. Additionally, both are permanently banned from trading, soliciting, and registering with the CFTC, and are prohibited from engaging in further illegal off-exchange commodity transactions.
Melanie Damian, Esq., has been appointed as Special Monitor, Corporate Manager, and Equity Receiver to oversee the collection of restitution and distribution to PBC’s customers. Damian was previously appointed in related cases involving Lloyds Commodities, LLC and Hunter Wise Commodities, LLC, through which PBC allegedly conducted the illegal transactions.
The CFTC cautions that restitution orders do not guarantee full recovery of lost funds, as wrongdoers may lack sufficient assets. The agency remains committed to protecting customers and holding those who violate commodity laws accountable.
Source: CFTC.gov
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