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Screenshot of a breaking news alert e-mail from Q2 2017
The U.S. Commodity Futures Trading Commission (CFTC) today announced that the U.S. District Court for the Southern District of Florida granted the CFTC’s motion for entry of a final default judgment Order against Defendants Harvard Assets LLC (Harvard Assets), London Assets Inc.(London Assets), and Harvard International Trading, Inc. (Harvard International), all three with their place of business in Florida, and their controlling person, Todd Owen Marshall, with a last known address in Deerfield Beach, Florida.
The Defendants were ordered to pay disgorgement totaling $612,892 and a civil monetary penalty totaling $1,838,676. The Order also imposes permanent trading, solicitation, and registration bans against the Defendants and prohibits them from violating provisions of the Commodity Exchange Act (CEA).
The Order, entered on May 17, 2016, stems from a CFTC Complaint filed on September 28, 2015, as amended on February 18, 2016, that charged the Defendants with engaging in illegal, off-exchange transactions in precious metals with retail customers on a leveraged, margined, or financed basis and the three entity Defendants with failing to register with the CFTC as Futures Commission Merchants (FCMs), as required under the CEA. (See CFTC Complaint and Press Release 7250-15, September 28, 2015, and the February 18, 2016, Amended Complaint as a Related Link.)
Specifically, the Order finds that, from on or around July 16, 2011 to April 30, 2012 or later, Harvard International and Marshall solicited at least 42 retail customers to engage in at least 241 financed precious metals transactions, reflecting a total value of over $3.6 million worth of metals, and that Harvard International received at least approximately $534,226 in commissions from those customers.
The Order further finds that, from on or around September 6, 2012 or earlier to March 5, 2013 or later, Harvard Assets, London Assets, and Marshall solicited retail customers to engage in leveraged, margined, or financed precious metals transactions, and that at least 14 Harvard Assets retail customers paid at least $78,665 in commissions to London Assets in connection with at least 48 financed precious metals transactions reflecting a total value of over $693,000 worth of metals.
In addition, the Order finds that Harvard International, Harvard Assets, and London Assets each solicited or accepted orders for retail commodity transactions and in connection with such orders accepted funds and thus acted as unregistered FCMs.
Lastly, the Order finds that Marshall, as controlling person for the other three Defendants, is liable for their violations of the CEA as well as his own, and that the three entity Defendants are liable as principals for the CEA violations committed by their officers, employees, and agents, including Marshall.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, off-exchange leveraged, margined, or financed transactions such as those conducted by the Defendants are illegal unless they result in actual delivery of metal within 28 days. According to the Order, precious metals were never actually delivered to the Defendants’ customers either by the Defendants or by the precious metals wholesalers through which the Defendants conducted their customers’ precious metals transactions, namely Worth Group Inc. and Hunter Wise Commodities, LLC.
The CFTC previously brought and has settled enforcement actions against both the Worth Group and Hunter Wise Commodities in the U.S. District Court for the Southern District of Florida. The CFTC sued Worth Group in August 2013, charging Worth with engaging in illegal, off-exchange precious metals transactions and other violations (see CFTC Press Releases 6666-13 and 7318-16). The CFTC sued Hunter Wise Commodities and others in December 2012, charging the Defendants with engaging in illegal, off-exchange precious metals transactions and other violations (see CFTC Press Releases 6447-12 and 6935-14).