The U.S. Commodity Futures Trading Commission (CFTC) has once again shown its strictness when it comes to following the provision of the Dodd-Frank act that addresses retail commodity trading. The US regulator has jus announced its fourth action in less than a month against violations of this provision.
The CFTC has charged Florida-based North American Asset Management, LLC, its owner and president Alexi Bethel, as well as its owner and managing director Steven Labadie with engaging in illegal, off-exchange precious metals transactions.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, leveraged, margined, or financed transactions, such as those run by NAAM, are illegal unless they lead to actual delivery of metals within 28 days. The CFTC complaint alleges that metals were never actually delivered in connection with the transactions carried out by NAAM.
According to the complaint, from at least March 2012, and continuing through at least March 2013, NAAM, by and through its employees, including Bethel and Labadie, solicited retail customers to engage in leveraged, margined, or financed precious metals transactions. During that period, NAAM collected $2,565,272 from at least 66 of its customers. The company received commissions and fees totaling $648,759.60.
In addition, NAAM acted as a Futures Commission Merchant (FCM), but failed to register with the CFTC as an FCM.
The CFTC seeks disgorgement of ill-gotten gains, civil monetary penalties, restitution to affected customers, permanent registration and trading bans, as well as a permanent injunction from future violations of the CEA.
You can view the full announcement from the CFTC by clicking here.