HOUSTON, TX – October 24, 2014 – Mark E. Rice has been permanently barred from trading and registration after a default judgment was entered against him and his company, Financial Robotics, Inc. (FinRob), by Judge Lee H. Rosenthal of the U.S. District Court for the Southern District of Texas. The judgment, dated October 9, 2014, stems from a complaint filed by the Commodity Futures Trading Commission (CFTC) on June 29, 2011.
The CFTC alleged that Rice, through FinRob, operated a fraudulent scheme beginning in at least June 2008, soliciting approximately $1.7 million from a single investor to trade leveraged off-exchange foreign currency contracts. Prosecutors say Rice and FinRob falsely represented the investment as “risk free” and guaranteed, falsely claiming it was insured against loss and that the principal would be returned.
The court found that at least $576,000 of customer funds were misappropriated by Rice, who transferred the money to companies he controlled. Of that amount, at least $404,000 was then used for personal and business expenses. FinRob is required to pay $827,000 in restitution and a $2,481,000 civil monetary penalty. Rice is also subject to permanent trading and registration bans, and is prohibited from violating the Commodity Exchange Act.
This judgment follows a previous consent order entered on January 13, 2014, where Rice agreed to pay a combined $1.5 million in restitution and penalties to settle the CFTC action. The CFTC notes that restitution orders do not guarantee recovery of lost funds, as wrongdoers may lack sufficient assets.
The CFTC expressed gratitude for the assistance provided by the National Futures Association, the British Virgin Islands Financial Services Commission, the Netherlands Authority for the Financial Markets, and the United Kingdom’s Financial Conduct Authority in this case. The agency encourages anyone with information about potential commodity trading law violations to contact them via toll-free hotline at 866-FON-CFTC or file a complaint online.
Source: CFTC.gov
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