Michael J. Siegel, of Northfield, New Jersey, has been slapped with a default judgment and permanent injunction following a case brought by the U.S. Commodity Futures Trading Commission (CFTC). Judge Noel L. Hillman of the U.S. District Court for the District of New Jersey issued the order on December 30, 2014, stemming from a complaint originally filed on September 27, 2013.
Siegel, along with his companies TOTE Fund LLC and MJS Capital Management LLC, were found to have misappropriated approximately $191,689 from the Monarch Futures Fund LLC and QEP Futures Fund LLC, two commodity pools he operated. The CFTC found that Siegel diverted funds from the pools for personal use, including covering non-pool expenses and taking unauthorized fees. Despite earning nearly $320,000 in fees, Siegel allegedly transferred over $511,000 from the pool’s accounts to his own personal accounts, credit cards, and to at least one other individual.
The court order mandates that Siegel and MJS, jointly and severally, pay $104,684.47 in restitution, $86,503.36 in disgorgement, and a $259,510.08 civil monetary penalty. Additionally, Siegel and TOTE are jointly responsible for $105,185.89 in disgorgement and a $315,557.67 civil penalty. The order also includes permanent bans on trading and registration for all defendants.
Further violations included failing to return funds to pool participants requesting withdrawals from QEP, and failing to provide monthly statements to Monarch pool participants as required by CFTC regulations. The CFTC warns that victims may not fully recover their losses due to potential limitations in the defendants’ assets.
The case was led by CFTC Division of Enforcement staff members Kara L. Mucha, James A. Garcia, Michael W. Solinsky, Charles D. Marvine, and Gretchen L. Lowe.
Source: CFTC.gov
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