New York, NY – May 21, 2007 – U.S. District Court Judge Lewis A. Kaplan entered a default order against American Energy Exchange (AMENX) and York Commodities, requiring them to pay $3,262,788.70 in restitution to victims of their fraudulent scheme. The court also imposed a $260,000 civil monetary penalty against AMENX and a $130,000 penalty against York Commodities.
The judgment resolves charges brought by the Commodity Futures Trading Commission (CFTC) in a complaint filed in the Southern District of New York (CFTC v. American Energy Exchange, et al., 06 CV 7017). The CFTC alleged that York Commodities fraudulently solicited customers to trade options on energy futures contracts through AMENX.
According to the court’s findings, York Commodities misled customers into believing that AMENX was a legitimate futures exchange, that York Commodities was its broker, and that both companies were based in the United States. To reinforce this false impression, York Commodities leased a fax number with a New York area code. AMENX furthered the deception by falsely listing firms as members on its website, despite the fact that none were actual members and had no knowledge of the exchange.
Customers were instructed to wire funds to bank accounts in Hong Kong and Germany under the promise of substantial profits. However, the CFTC found that investors lost nearly all of their investments, totaling over $3,262,788.70.
The court’s order permanently prohibits AMENX and York Commodities from engaging in any business activities related to commodity futures and options trading. The CFTC emphasized that York Commodities is not affiliated with York Commodities located in Scarsdale, New York, or York Commodities, Inc. in York, Nebraska.
The CFTC collaborated with numerous international regulatory bodies, including the Australian Securities and Investment Commission, the Hong Kong Securities and Futures Commission, and others, in this investigation.
Source: CFTC.gov
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