West Palm Beach, FL – Michael Morgan, along with three co-defendants, has been permanently barred from the commodities market and ordered to pay restitution and penalties for a fraudulent scheme involving foreign currency trading, according to a consent order entered by the U.S. District Court for the Southern District of Florida on September 14, 2006. The case stems from a CFTC enforcement action filed in March 2005.
Morgan, the manager of Mercury Management, L.C. of Lake Worth, Florida, was charged with fraudulent solicitation and misappropriation of customer funds, violating the Commodity Exchange Act (CEA) and CFTC regulations. Also named in the order were Andrew Bartos of Houston, Texas, and Bruce N. Crown, who was incarcerated in Jessup, Georgia at the time of the ruling. Mercury Management, along with Mercury Partners, Inc., and Mercury Financial Partners, Inc., were also implicated in the scheme.
Between August and November 2004, Mercury Partners and its employees, including Crown, allegedly lured customers with false promises about the profitability and safety of forex contracts. Instead of investing the funds as promised, Mercury Partners transferred the money to Mercury Management and Mercury Financial Partners. Morgan and Bartos, principals of these entities, then reportedly used the funds for personal expenses.
The court imposed a total of over $508,000 in civil monetary penalties against Mercury Management, Morgan, Bartos, and Crown for violations of the anti-fraud provisions of the CEA and CFTC regulations. Additionally, they are required to pay restitution to defrauded customers. Crown faced separate charges for a related transaction, ordered to pay an additional $50,000 in restitution for fraudulently soliciting funds for crude oil options that never existed. He deposited the money into his personal account and withdrew it as cash.
Default judgments had previously been entered against Mercury Partners, Inc., a Bahamian corporation with an office in Boca Raton, Florida, and Mercury Financial Partners, Inc. of Pompano Beach, Florida. These companies were jointly and severally liable for $148,756 in restitution and each ordered to pay $1,080,000 in civil penalties.
Source: CFTC.gov
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