Deerfield Beach, Florida – Todd Owen Marshall and three companies he controlled have been slapped with a hefty judgment for running an illegal precious metals scheme, the Commodity Futures Trading Commission (CFTC) announced. Judge Beth Bloom of the U.S. District Court for the Southern District of Florida issued a final default judgment against Marshall, Harvard Assets LLC, London Assets Inc., and Harvard International Trading, Inc. on May 17, 2016.
The judgment orders the defendants to pay a combined $2,451,568, including $612,892 in disgorgement and $1,838,676 in civil penalties. The court also permanently banned them from engaging in any future trading, solicitation, or registration activities related to commodity markets, and prohibits further violations of the Commodity Exchange Act (CEA).
The CFTC originally filed a complaint in September 2015, alleging the defendants engaged in illegal, off-exchange transactions in precious metals with retail customers using leverage and margin. They also failed to register with the CFTC as Futures Commission Merchants (FCMs), a requirement under the CEA.
Between July 2011 and April 2012, Harvard International and Marshall allegedly solicited at least 42 customers into over $3.6 million worth of financed precious metals transactions, collecting approximately $534,226 in commissions. From September 2012 to March 2013, Harvard Assets, London Assets, and Marshall targeted retail customers with leveraged precious metals deals, earning at least $78,665 in commissions from 14 customers on $693,000 worth of transactions.
The CFTC found that none of the defendants ever actually delivered the precious metals to their customers, violating the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 which requires actual delivery within 28 days for such off-exchange transactions. The transactions were facilitated through wholesalers Worth Group Inc. and Hunter Wise Commodities, LLC.
Marshall, as the controlling person of the three companies, is held liable for the violations committed by them and for his own actions. The companies are also liable for the actions of their employees and agents, including Marshall, according to the court order.
Source: CFTC.gov
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