Martin Armstrong, of Maple Shade, New Jersey, has been ordered to pay over $27 million in restitution as part of a settlement with the U.S. Commodity Futures Trading Commission (CFTC) for fraud. The consent orders, entered by the U.S. District Court for the Southern District of New York on June 24, 2008, and July 31, 2009, also permanently bar Armstrong, along with his firms Princeton Global Management Ltd. (PGM) and Princeton Economics International Ltd. (PEI), from trading commodities or acting in any registered capacity.
The CFTC originally filed a complaint against Armstrong, PGM, and PEI on September 13, 1999, alleging that they defrauded customers between November 1997 and September 1999. The complaint detailed a scheme in which the defendants concealed substantial trading losses within a commodity pool and issued fraudulent reports inflating the net asset value of customer investments.
Armstrong is currently incarcerated, serving a five-year sentence at the Federal Correctional Institution at Fort Dix, New Jersey. He pleaded guilty in a related criminal case brought by the U.S. Attorney’s Office for the Southern District of New York on August 7, 2006, and was sentenced on April 10, 2007, by Judge John F. Keenan.
This resolution fully settles the CFTC’s charges against Armstrong, PEI, and PGM. The case is connected to a parallel investigation conducted by the Securities and Exchange Commission.
The CFTC has previously secured settlements with other individuals involved in the fraudulent scheme. In July 2004, Harold Ludwig, former co-director of PGM, was ordered to pay $4.9 million in restitution and a $2 million penalty. William Rogers and Maria Toczylowski, former executives at Republic New York Securities Corp., were also penalized, with restitution and penalties totaling $6.64 million. Additionally, in December 2001, Republic New York Securities Corp. was fined $5 million for its role in assisting Armstrong and his firms in concealing losses and operating a Ponzi scheme.
Source: CFTC.gov
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