Ted L. Romeo of Pompano Beach, Florida, has been charged with precious metals fraud by the U.S. Commodity Futures Trading Commission (CFTC), the agency announced on May 26, 2016. The CFTC filed an order instituting proceedings and settling charges against Romeo, along with Cypress Wealth Management, Inc., and Richard D. Schrutt of Tampa, Florida.
The CFTC alleges that Romeo, Schrutt, and Cypress Wealth Management illegally offered off-exchange financed transactions in precious metals to retail customers, and failed to register with the CFTC as a Futures Commission Merchant (FCM) as required by law. From January 2012 to at least March 2013, the respondents reportedly solicited customers to buy and sell physical precious metals in leveraged, off-exchange transactions.
Customers allegedly paid a percentage of the purchase price for the metals, receiving financing for the remainder and paying commissions and fees. These transactions violated the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which requires such financed transactions with retail customers to be executed on a registered exchange.
The settlement requires Romeo, Schrutt, and Cypress Wealth Management to jointly pay $330,764.29 in restitution to affected customers. Additionally, a $100,000 civil monetary penalty will be levied against all three respondents. Romeo is also ordered to pay an additional $100,000 civil monetary penalty. The order also includes a cease and desist from further violations of the Commodity Exchange Act and prohibits them from trading on or through any registered entity.
The CFTC cautions that restitution orders do not guarantee full recovery of lost funds, as wrongdoers may lack sufficient assets. The agency remains committed to protecting customers and holding those who commit fraud accountable. The case was led by CFTC staff members Laura Brookover, Michael Loconte, Alison B. Wilson, and Rick Glaser.
Source: CFTC.gov
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