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Screenshot of a breaking news alert e-mail from Q2 2017
The U.S. Commodity Futures Trading Commission (CFTC) today reminded the public of the rigidity of Dodd-Frank act and, in particular, of the provision that tackles retail commodity trading.
In this case, the US regulator announced the filing of a civil injunctive enforcement action in the U.S. District Court for the Southern District of Florida against Harvard Assets LLC, London Assets Inc. and Harvard International Trading, Inc., and their controlling person, Todd Owen Marshall, from Florida.
The CFTC charges the defendants with engaging in illegal, off-exchange transactions in precious metals with retail customers on a leveraged, margined, or financed basis, In addition, the companies are charged with acting as Futures Commission Merchants (FCMs) without registering as such with the CFTC.
The complaint alleges that from July 16, 2011 to at least April 30, 2012, Harvard International and Marshall solicited at least 42 retail customers to engage in at least 241 financed precious metals transactions. The defendants are found to have accepted more than $1.5 million from those customers with respect to these transactions.
The complaint also states that from around September 6, 2012 to March 5, 2013, Harvard Assets, London Assets, and Marshall solicited at least $231,963 from at least 14 retail customers to engage in at least 48 leveraged, margined, or financed precious metals transactions.
Marshall is further charged with liability for the violations by the Entity Defendants.
The watchdog stresses that under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, off-exchange leveraged, margined, or financed transactions are illegal unless they result in actual delivery of metal within 28 days.
The CFTC complaint alleges that metals were never actually delivered in connection with the leveraged, margined, or financed precious metals transactions on behalf of the defendants’ customers.
The regulator seeks disgorgement of ill-gotten gains, restitution, civil monetary penalties, permanent registration and trading bans, as well as a permanent injunction from future violations of the Commodity Exchange Act.
To view the official announcement from CFTC, click here.