CFTC Charges Unregistered CTA With Fraud

Dec 1 2006 | 12:54pm ET

The Commodity Futures Trading Commission on Nov. 28 filed a civil action against Peter Hoffman for allegedly fraudulently soliciting potential customers and opening discretionary trading accounts, acting as an unregistered commodity trading advisor and violating an order entered by the CFTC against him.

In March 1999, the CFTC imposed sanctions upon Hoffman based on findings that he had fraudulently marketed a commodity trading system while acting as an unregistered CTA, which is in violation of the Commodity Exchange Act and CFTC regulations. Hoffman was ordered to cease and desist from making false representations, prohibited from trading on contract markets for a period of five years, and prohibited from ever applying for registration with the CFTC in any capacity and from ever engaging in any activity requiring registration.

However, Hoffman violated the CEA, CFTC regulations and the March 1999 order by simply ignoring previous sanctions and continuing his charade, according to the recent CFTC complaint.

On Nov. 29, Judge Joan Lefkow of the United States District Court for the Northern District of Illinois issued an order freezing Hoffman’s assets and prohibiting him from destroying books and records. Judge Lefkow has set a hearing on the CFTC’s motion for preliminary injunction in the matter for Dec. 5.

In its ongoing litigation, the CFTC is seeking preliminary and permanent injunctive relief, repayment of customer losses, and payment of monetary penalties.


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