LAKE WORTH, FL – October 8, 2014 – Richard V. Morello, along with Junior Alexis and their company Vertical Integration Group LLC, have been slapped with a hefty penalty and permanent trading ban following an investigation by the U.S. Commodity Futures Trading Commission (CFTC). Judge Beth Bloom of the U.S. District Court for the Southern District of Florida issued a default judgment on September 29, 2014, finding the defendants engaged in illegal, off-exchange precious metals transactions.
Morello, of Lake Worth, Florida, and Alexis, of Boynton Beach, Florida, are accused of soliciting retail customers into leveraged, margined, or financed precious metals transactions – including gold, silver, platinum, and palladium – without ensuring actual delivery of the metals within the legally required 28-day timeframe. These transactions were allegedly executed through Hunter Wise Commodities LLC.
The court ordered Morello and Vertical, jointly and severally, to pay $893,859 in restitution and a $1,663,698 civil monetary penalty. Alexis, also jointly and severally with Morello and Vertical, is responsible for $563,131 in restitution and a $140,000 penalty. All defendants are permanently banned from trading, soliciting, and registering with the CFTC, effectively prohibiting them from future illegal commodity transactions.
The CFTC’s complaint, originally filed on January 13, 2014, alleges that approximately 39 of Vertical’s customers invested $1,008,583 between July 2011 and February 2013, resulting in losses of $893,859 due to trading losses, commissions, and fees. Vertical reportedly profited by $554,566 from these transactions.
The case highlights the CFTC’s enforcement of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which prohibits leveraged, margined, or financed off-exchange transactions unless actual delivery of the commodity occurs within 28 days. Melanie Damian, Esq. has been appointed to collect restitution and distribute funds to affected customers.
The CFTC reminds potential victims that restitution orders do not guarantee full recovery of lost funds, as defendants may lack sufficient assets. The agency vows to continue its efforts to protect investors from fraudulent schemes.
Source: CFTC.gov
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