STATEN ISLAND, NY – October 19, 2016 – Scott Platto has been hit with a hefty penalty and trading ban following a federal court judgment in a Commodity Futures Trading Commission (CFTC) case. The judgment, entered on October 12, 2016, by U.S. District Judge Ann M. Donnelly, stems from a CFTC complaint filed on September 25, 2013, alleging illegal, off-exchange precious metals transactions.
Platto, formerly of Staten Island, New York, and his company, The Yorkshire Group, Inc., were found to have engaged in unlawful transactions with retail customers involving leveraged, margined, or financed precious metals between September 2011 and August 2012. The CFTC alleged they solicited $93,700 from eleven customers to purchase gold, silver, platinum, and palladium without ensuring actual delivery of the metals.
The court ordered Platto and Yorkshire to jointly pay a $1.54 million civil monetary penalty and to disgorge $29,801.64 in ill-gotten gains. Additionally, permanent trading and registration bans were imposed, prohibiting further violations of the Commodity Exchange Act (CEA) and CFTC Regulations.
The court found Platto liable both for his own violations and as the controlling person of Yorkshire, which was also held responsible for the actions of its officers and employees. The transactions violated the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which prohibits off-exchange leveraged transactions unless actual delivery of the metal occurs within 28 days – a condition not met in this case.
This case is related to a previous CFTC enforcement action against Hunter Wise Commodities, LLC, charged with similar illegal practices. In May 2014, Hunter Wise was found to have neither purchased nor delivered precious metals to retail customers and was subject to a permanent injunction and financial penalties.
The CFTC cautions that victims of this fraud may not fully recover their losses due to potential limitations in the defendants’ assets. The agency remains committed to protecting customers and holding wrongdoers accountable.
Source: CFTC.gov
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