New York, NY – Michael James Seward and Yan Kaziyev are facing significant penalties after a default judgment was entered against them on June 9, 2014, by Judge Sidney H. Stein of the U.S. District Court for the Southern District of New York. The judgment, stemming from a complaint filed by the U.S. Commodity Futures Trading Commission (CFTC) on March 24, 2014, found Seward and Kaziyev, along with their company SK Madison Commodities, LLC (SKMC), liable for fraud.
The court ordered Seward, Kaziyev, and SKMC to pay a combined restitution of $1,036,981.01 and a civil penalty of $2,486,865.57. The CFTC alleged that the defendants fraudulently solicited over $1.3 million from the public under the guise of trading futures in a commodity pool. The complaint detailed that Seward and Kaziyev misrepresented their trading practices and historical returns to investors.
According to the CFTC, the defendants further deceived investors by distributing false account statements and performance reports that falsely indicated substantial profits while, in reality, they were losing money and misappropriating funds for personal use. The charges also included registration violations. As a result of the CFTC’s action, over $500,000 in pooled participant funds controlled by the defendants and a successor company, designated as a Relief Defendant, were frozen.
The court’s order also permanently bans Seward and Kaziyev from engaging in any future trading activities and requires them to register with the CFTC. Any remaining assets controlled by SK Madison, LLC, will be applied towards satisfying the restitution obligation.
The case was led by CFTC Division of Enforcement staff members Daniel Jordan, Michael Loconte, Matthew Elkan, and Rick Glaser.
The CFTC urges anyone with information about potential commodity trading violations to contact them via their toll-free hotline at 866-FON-CFTC or submit a tip online.
Source: CFTC.gov
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