Fort Lauderdale, FL – Martin Sommers and his company, International Monetary Metals, Inc. (IMM), have been slapped with a hefty penalty following a judgment in the U.S. District Court for the Southern District of Florida. Judge William J. Zloch ruled in favor of the Commodity Futures Trading Commission (CFTC), ordering Sommers and IMM to jointly pay $2,469,783 in disgorgement and a $7,409,349 civil monetary penalty.
The judgment, entered August 1, 2016, stems from a September 30, 2014 CFTC complaint alleging that IMM and Sommers engaged in illegal, off-exchange precious metals transactions with retail customers, offering leveraged and margined trades without proper registration. Specifically, the CFTC accused IMM of acting as an unregistered Futures Commission Merchant (FCM).
Between July 16, 2011, and March 31, 2013, Sommers and IMM allegedly solicited customers into these leveraged precious metals transactions, collecting $2,469,783 in commissions from 185 customers. The court found that IMM accepted funds for these transactions, functioning as an unregistered FCM.
Sommers, as the controlling person of IMM, is held liable for the company’s violations, as well as his own actions. The judgment also holds IMM responsible for the actions of its officers and employees, including Sommers.
The CFTC’s investigation revealed that the transactions violated the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which prohibits off-exchange leveraged transactions unless actual delivery of the metal occurs within 28 days. According to the judgment, no precious metals were ever delivered to customers, either directly by IMM or through wholesalers Worth Group Inc. and AmeriFirst Management, LLC.
This case is part of a broader crackdown on illegal precious metals trading. The CFTC previously brought enforcement actions against Worth and AmeriFirst, securing settlements requiring restitution and penalties totaling over $35 million. The CFTC settled with Worth in February 2016, and obtained a supplemental consent order against AmeriFirst and its principals in July 2014, demanding over $25 million in restitution and $10 million in penalties.
The CFTC reminds investors that court orders requiring repayment may not fully cover losses.
Source: CFTC.gov
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