A recent flurry of releases by the U.S. Commodity Futures Trading Commission (CFTC) continues as today it was announced that Magistrate Judge Jacquelyn D. Austin of the U.S. District Court for the District of South Carolina entered a Consent Order for Permanent Injunction resolving charges against Robert Stanley Harrison of Easley, South Carolina, for operating a fraudulent futures and off-exchange foreign currency pool scheme called Investors Choice Advisors LLC (ICA).
The Order stems from a CFTC Enforcement complaint filed on February 6, 2013 (see CFTC Press Release 6513-13). The Order finds that Harrison, individually and while acting as an unregistered Commodity Pool Operator (CPO), fraudulently solicited, issued false statements, and misappropriated funds in connection with the operation of ICA from June 2011 to February 2013. According to the Order, Harrison guaranteed pool participants’ principal investment against risk of loss and further guaranteed 100 percent profits on those investments within 60 or 90 days. To perpetuate the fraud, Harrison and his agent issued false investment contracts to pool participants that represented the purported profits. Harrison also improperly operated the commodity pool and failed to register himself as a CPO and his agent as an Associated Person with the CFTC.
On May 14, 2013, Harrison was indicted on criminal charges arising from the same fraudulent conduct that was the subject of the CFTC’s action (see United States v. Harrison, 8:13-cr-00354-MGL (D.S.C.)). Harrison pleaded guilty to these charges and, on September 22, 2014, was sentenced to 1 year and 1 day in prison and ordered to pay restitution to victims of his fraud.
According to the Court’s Order in the CFTC’s action, “Defendant’s violations of the CEA [Commodity Exchange Act] merit the award of significant restitution. However, the Court recognizes that the court in a related criminal action … has ordered that the Defendant pay restitution … to the defrauded investors of the Defendant in connection with the same conduct at issue in this action. Accordingly, restitution is not ordered in this action.”
The Order includes a civil monetary penalty of $275,000 and resolves the case in its entirety but for the imposition of permanent trading and registration bans. A motion by the CFTC to permanently ban Harrison from the industry is currently pending with the Court.
The CFTC appreciates the assistance of the Office of the U.S. Attorney for the District of South Carolina.
CFTC Division of Enforcement staff members responsible for this action are Amanda Harding, Daniel Jordan, Michael Loconte, and Rick Glaser.
To see the official CFTC press release, click here.