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Stephen Craig Symons and James David Kline personally liable for almost $8 million
Californian fraudsters which engaged in a massive fraud scheme have been brought to justice after more than a year and a half of legal battles. The US Commodity Futures Trading Commission has filed its complaint against CTI Group, Cooper Trading, Stephen Craig Symons and James David Kline back in May 2012 for fraudulent sales practices related to two automated trading systems known as Boomer and Victory.
Three days later all assets of the defendants and related companies have been frozen. Symons and Kline have transferred funds from their fraudulent activity to two companies – Snonys Inc. and Dragonfyre Magick Incorporated which have been named in the CFTC complaint as relief defendants.
The CFTC released details of the fine composition in its press release and states that the court order mandates CTI Group and Cooper Trading to pay $10.175 million in disgorgement and a $10 million civil monetary penalty, while Symons is to pay over $3.150 million in disgorgement and a $4.5 million civil monetary penalty, and Kline over $275,000 in disgorgement and a $1 million civil monetary penalty.
The court order finds that defendants and their agents and employees have made false and misleading statements to clients when convincing them to purchase automated trading systems Boomer and Victory.
Material information was conceded including the track record and past profitability of the systems, the transaction costs and the risks associated with the use of the strategies in question. Additionally it appears that it was standard practice for CTI’s personnel to use false names when communicating with the company’s clients.
Sales staff, which includes Kline, have made claims to clients that the company allegedly offers a money-back guarantee. The price tag of the systems was quite hefty with subscriptions selling at between $5000 and $6000 that costed way more than 1000 clients at least $11 million. That’s some ‘Wolf Of Wall Street’ story we got here… and it ends in a similar way too! It certainly qualifies for one of the largest CFTC fines.
For the full press release visit CFTC’s website.