Michael Hayes of Poquoson, Virginia, has been ordered to pay $240,000 in civil penalties and disgorge $2,908,620.69 in ill-gotten gains following a judgment entered by the U.S. Commodity Futures Trading Commission (CFTC) on March 13, 2007. The judgment, issued by the Honorable Rebecca Beach Smith of the U.S. District Court for the Eastern District of Virginia, also permanently prohibits Hayes from soliciting funds for commodity futures or options trading.
Hayes operated Coldwell Publishing, Inc., a California corporation, under the alias Frank Richards. The CFTC brought charges against Hayes and Coldwell for fraudulently promoting a commodity futures and options trading system called “The Insider’s Profit Matrix” (IPM). Promotional materials falsely claimed IPM users could earn $50,000 in a single month and that the system had turned $200 into $2,136,000 in two years, according to the CFTC.
The judgment also includes a $8,725,862 civil monetary penalty against Coldwell Publishing, Inc., in addition to the disgorgement order. Hayes sold at least 15,000 copies of the IPM system to the public.
“Rest assured, there will be other systems sold on the Internet and through various media outlets that will guarantee outrageous profits with limited risk,” said Gregory Mocek, the CFTC’s Director of Enforcement. “Each investor who uses a trading system must perform some level of due diligence before they invest. Otherwise, the investor’s experience may be akin to putting a blindfold on and throwing darts at an imaginary dartboard.”
The case originated from CFTC v. Michael Hayes and Coldwell Publishing, Inc., case number 4:06cv130 in the Eastern District of Virginia. The CFTC thanked the Office of the United States Attorney for the Eastern District of Virginia for their assistance in the matter.
The CFTC encourages the public to report suspicious activities involving futures or commodity options. Consumer advisories and a complaint line (1-866-FON-CFTC) are available to help individuals identify and avoid potential fraud.
Source: CFTC.gov
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