BOCA RATON, FL – November 8, 2006 – Michel Geraud, also known as Mike Jeraux, has been permanently banned from all commodity-related activity following a federal court order issued October 31, 2006, in the Southern District of Florida. The U.S. Commodity Futures Trading Commission (CFTC) brought the action against Geraud and his firm, G7 Advisory Services, LLC, alleging a fraudulent scheme targeting retail investors.
According to the CFTC’s complaint, filed April 12, 2005, Geraud and G7 Advisory fraudulently solicited approximately $2.1 million from at least 136 investors, both within and outside the United States, to invest in options trading on foreign currency (forex). The scheme spanned from at least May 2004 to January 2005.
The court found that Geraud misrepresented the potential profits and inherent risks associated with forex options trading. He allegedly told at least one prospective client that numerous investors had tripled or quadrupled their money, despite the fact that all G7 Advisory clients ultimately lost their investments. During the period of the fraud, G7 Advisory generated at least $1.3 million in commissions and fees.
As a result of the order, G7 Advisory is required to pay $2.1 million in restitution to defrauded investors and a $1.5 million civil monetary penalty. Geraud, identified as the controlling person responsible for the day-to-day operations of G7 Advisory, is jointly and severally liable for $500,000 of the restitution and individually liable for a $250,000 civil monetary penalty. The court’s order permanently prohibits both Geraud and G7 Advisory from engaging in any future commodity-related activities, including trading and soliciting investments.
The case was handled by CFTC staff members Rachel Entman, Michael J. Otten, Jason Gizzarelli, Gretchen Lowe, and Lacey Dingman.
Source: CFTC.gov
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