BOCA RATON, FL – Scott Newcom and Anthony Pulieri, principals of Joseph Glenn Commodities LLC and JGCF LLC, have been charged with fraud by the U.S. Commodity Futures Trading Commission (CFTC), officials announced March 27, 2013. The charges stem from illegal, fraudulent off-exchange financed transactions in precious metals targeting retail customers.
The CFTC’s order requires Joseph Glenn, JGCF, Newcom, and Pulieri to collectively pay approximately $635,000 in restitution to affected customers, covering losses incurred due to the scheme. Additionally, approximately $330,000 remaining in customer accounts must be returned. Pulieri faces a separate $100,000 civil monetary penalty.
According to the CFTC, from July 2011 through June 2012, Newcom and Pulieri, operating through their companies, solicited customers via telephone and online to purchase physical precious metals – including gold, silver, copper, platinum, and palladium – through leveraged off-exchange transactions. Customers made partial payments, while Joseph Glenn and JGCF allegedly financed the remaining balance, charging interest.
These transactions were illegal under amendments to the Dodd-Frank Wall Street and Consumer Protection Act of 2010, which became effective July 16, 2011. Such financed transactions with retail customers must be conducted on or be subject to the rules of a CFTC-approved exchange. The Respondents’ transactions were conducted off-exchange, violating these regulations.
The CFTC found that Joseph Glenn and JGCF acted as dealers for Hunter Wise Commodities, LLC, a company previously charged with fraud by the CFTC in December 2012. Hunter Wise was purportedly the source of both the metals and the financing. However, investigators determined that neither Joseph Glenn, JGCF, nor Hunter Wise actually purchased or held metal for customers, nor did they disburse any funds to finance the purchases. As a result, customers never received ownership or possession of the commodities they believed they had bought.
Furthermore, the CFTC alleges that Newcom and Pulieri defrauded customers by misrepresenting the profitability of the transactions and failing to disclose all associated fees, including commissions, service charges, and interest.
The order permanently prohibits the Respondents from registering with the CFTC and imposes a five-year ban on trading for others. They are also required to fully cooperate with the CFTC in any further investigations.
Source: CFTC.gov
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