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Screenshot of a breaking news alert e-mail from Q2 2017
The U.S. Commodity Futures Trading Commission (CFTC) obtained $1,127,855 in restitution for defrauded pool participants and $3,383,565 in civil monetary penalties in a federal court Default Judgment Order against Defendants Gerard Suite (who is known by numerous aliases, including Rawle Gerard Suite, Jerry Suite, and Jerry Snead) and his company, STA Opus NR LLC (STA Opus), as well as a Consent Order against Frank Collins for knowingly or recklessly misappropriating at least $50,000 of STA Opus customers’ funds.
The Court’s Orders stem from a CFTC Complaint filed on August 8, 2016 (see CFTC Press Release 7423-16, August 9, 2016: CFTC Charges California Residents Frank J. Collins and Gerard Suite and Their Company, STA Opus NR LLC, with Fraud, Misappropriation, and Failing to Register with the CFTC).
The Default Order, entered by the Honorable Andrew J. Guilford, of the U.S. District Court for the Central District of California on November 13, 2017, finds that from at least January 2013 through May 6, 2016, when Suite was arrested by FBI agents, Suite and STA Opus fraudulently solicited customers by falsely representing that STA Opus’ commodity pool had positive annual rates of return, when in fact, STA Opus’ three commodity futures trading accounts had lost virtually all of the funds Defendants committed to trading, and failing to disclose a prior disciplinary history with the CFTC and State of California that included $2.5 million in restitution and fines in connection with conducting business as an unregistered investment advisor in California.
The Default Order also finds that Suite and STA Opus misappropriated $1,127,855 of pool participants’ monies and issued false account statements to participants that concealed their misappropriation of participants’ monies.
The Default Order further finds that STA Opus was acting as an unregistered commodity pool operator (CPO) and that Suite was acting as an unregistered associated person of the CPO when they fraudulently solicited pool participants.
The Consent Order
The Consent Order, also entered by the Honorable Andrew J. Guilford on September 13, 2017, requires Collins to pay $50,000 in restitution to STA Opus customers and imposes a $50,000 civil monetary penalty against Collins. The Consent Order finds that Collins helped Suite get his STA Opus business started in late 2012, after which at least 30 individuals invested approximately $1.6 million in the STA Opus commodity pool, and that Collins misappropriated at least $50,000 of those funds for his own benefit.
In addition to requiring Suite, Collins, and STA Opus to pay restitution and civil monetary penalties, the Orders also permanently prohibit them from further violations of the anti-fraud provisions of the Commodity Exchange Act and CFTC Regulations, as charged, and enter permanent trading, solicitation, and registration bans against Suite and Collins.
The CFTC cautions that Orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.