A federal court has issued a default judgment against Scott Platto and his company, The Yorkshire Group, Inc., for illegally selling precious metals to retail customers. The U.S. Commodity Futures Trading Commission (CFTC) filed the original complaint in September 2013, alleging unlawful, off-exchange transactions involving leveraged precious metals.
Judge Ann M. Donnelly of the U.S. District Court ordered Platto and Yorkshire to jointly pay a $1.54 million civil penalty and disgorge $29,801.64 in ill-gotten gains. Both are permanently banned from trading and registering with the CFTC, and prohibited from future violations of the Commodity Exchange Act (CEA) and related regulations.
The court found that between September 2011 and August 2012, Platto and Yorkshire solicited $93,700 from eleven customers for purchases of gold, silver, platinum, and palladium on a leveraged basis. They earned $29,801.64 in commissions on these transactions. Crucially, the precious metals were never delivered to the customers, violating Dodd-Frank Act regulations which require actual delivery within 28 days for off-exchange leveraged transactions.
Platto, as principal of Yorkshire, is held liable for both the company’s violations and his own. Yorkshire is also responsible for the actions of its employees and agents, including Platto. The case is connected to a prior CFTC enforcement action against Hunter Wise Commodities, LLC, which was also found to have engaged in similar illegal practices and was subject to a permanent injunction and financial penalties in 2014.
The CFTC reminds investors that court orders for repayment do not guarantee recovery of lost funds, as defendants may lack sufficient assets. The agency continues to pursue legal action against those who violate commodity trading laws.
Source: CFTC.gov
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