Case Summary

AMERICAN DERIVATIVES CFTC 1 05-CV 2492 NFA ID: 0339163

 Respondent/Effective Date Summary 
 NFA IDRespondentEffective Date
 0339163AMERICAN DERIVATIVES12/15/2009
 0274641BOOTH, DEVEREAUX DECATUR12/15/2009
 0362238BROKERAGE MANAGEMENT CORP12/15/2009
 0277720GERSTEL, LAYNE DAVID12/15/2009
 0342033INTERNATIONAL COMMODITY CLEARING02/07/2008
 0272801MITTLER, DAVID N12/15/2009
 0278238NATIONAL COMMODITIES CORPORATION INC02/07/2008
 Rule Summary 
 NFA IDRespondentRule Type
 0339163AMERICAN DERIVATIVES• CFTC33.10(c) - FRAUD RE COMMODITY OPTIONS
  • CFTC166.3 - FAILURE TO SUPERVISE
  • CFTC33.10(a) - FRAUD RE COMMODITY OPTIONS
  • CEA 4c(b) - ILLEGAL TRADING OF COMMODITY OPTIONS
 0274641BOOTH, DEVEREAUX DECATUR• CFTC33.10(a) - FRAUD RE COMMODITY OPTIONS
  • CFTC166.3 - FAILURE TO SUPERVISE
  • CEA 4c(b) - ILLEGAL TRADING OF COMMODITY OPTIONS
  • CFTC33.10(c) - FRAUD RE COMMODITY OPTIONS
 0362238BROKERAGE MANAGEMENT CORP• CFTC33.10(c) - FRAUD RE COMMODITY OPTIONS
  • CFTC166.3 - FAILURE TO SUPERVISE
  • CFTC33.10(a) - FRAUD RE COMMODITY OPTIONS
  • CEA 4c(b) - ILLEGAL TRADING OF COMMODITY OPTIONS
 0277720GERSTEL, LAYNE DAVID• CFTC33.10(a) - FRAUD RE COMMODITY OPTIONS
  • CFTC166.3 - FAILURE TO SUPERVISE
  • CEA 4c(b) - ILLEGAL TRADING OF COMMODITY OPTIONS
  • CFTC33.10(c) - FRAUD RE COMMODITY OPTIONS
 0272801MITTLER, DAVID N• CFTC166.3 - FAILURE TO SUPERVISE
  • CEA 4c(b) - ILLEGAL TRADING OF COMMODITY OPTIONS
  • CFTC33.10(c) - FRAUD RE COMMODITY OPTIONS
  • CFTC33.10(a) - FRAUD RE COMMODITY OPTIONS
 Action Summary 
 NFA IDRespondentAction Types
 0339163AMERICAN DERIVATIVES• CFTC INJUNCTIVE ACTION
 0274641BOOTH, DEVEREAUX DECATUR• CFTC INJUNCTIVE ACTION
 0362238BROKERAGE MANAGEMENT CORP• CFTC INJUNCTIVE ACTION
 0277720GERSTEL, LAYNE DAVID• CFTC INJUNCTIVE ACTION
 0342033INTERNATIONAL COMMODITY CLEARING• CFTC INJUNCTIVE ACTION
 0272801MITTLER, DAVID N• CFTC INJUNCTIVE ACTION
 0278238NATIONAL COMMODITIES CORPORATION INC• CFTC INJUNCTIVE ACTION
 Penalty/Event Summary 
 NFA IDRespondentPenalty/EventEvent Date
 0339163AMERICAN DERIVATIVES• MAKE RESTITUTION TO CUSTMERS12/15/2009
  • STOP SOLICITING12/15/2009
  • JOINT OWED12/15/2009
  • PERMANENT INJUNCTION12/15/2009
  • MAY NOT APPLY TO REGISTER12/15/2009
  • FINE $100000012/15/2009
  • TRADING PROHIBITION12/15/2009
  • OTHER (SEE NARRATIVE)12/15/2009
 0274641BOOTH, DEVEREAUX DECATUR• TRADING PROHIBITION12/15/2009
  • STOP SOLICITING12/15/2009
  • MAKE RESTITUTION TO CUSTMERS12/15/2009
  • OTHER (SEE NARRATIVE)12/15/2009
  • PERMANENT INJUNCTION12/15/2009
  • MAY NOT APPLY TO REGISTER12/15/2009
  • FINE $6000012/15/2009
 0362238BROKERAGE MANAGEMENT CORP• TRADING PROHIBITION12/15/2009
  • FINE $12000012/15/2009
  • PERMANENT INJUNCTION12/15/2009
  • MAY NOT APPLY TO REGISTER12/15/2009
  • OTHER (SEE NARRATIVE)12/15/2009
  • MAKE RESTITUTION TO CUSTMERS12/15/2009
  • STOP SOLICITING12/15/2009
  • JOINT OWED12/15/2009
 0277720GERSTEL, LAYNE DAVID• FINE $12000012/15/2009
  • STOP SOLICITING12/15/2009
  • TRADING PROHIBITION12/15/2009
  • MAKE RESTITUTION TO CUSTMERS12/15/2009
  • OTHER (SEE NARRATIVE)12/15/2009
  • PERMANENT INJUNCTION12/15/2009
  • MAY NOT APPLY TO REGISTER12/15/2009
 0342033INTERNATIONAL COMMODITY CLEARING• OTHER (SEE NARRATIVE)02/07/2008
  • MAKE RESTITUTION TO CUSTMERS02/07/2008
  • PERMANENT INJUNCTION02/07/2008
  • JOINT OWED02/07/2008
 0272801MITTLER, DAVID N• TRADING PROHIBITION12/15/2009
  • STOP SOLICITING12/15/2009
  • MAKE RESTITUTION TO CUSTMERS12/15/2009
  • OTHER (SEE NARRATIVE)12/15/2009
  • PERMANENT INJUNCTION12/15/2009
  • FINE $10000012/15/2009
  • MAY NOT APPLY TO REGISTER12/15/2009
 0278238NATIONAL COMMODITIES CORPORATION INC• MAKE RESTITUTION TO CUSTMERS02/07/2008
  • OTHER (SEE NARRATIVE)02/07/2008
  • PERMANENT INJUNCTION02/07/2008
  • JOINT OWED02/07/2008
 Narrative Summary 
Narrative for 0339163 - AMERICAN DERIVATIVES
Commodity Futures Trading Commission

Office of External Affairs (202) 418-5080

Three Lafayette Centre

1155 21st Street, NW

Washington, DC 20581

Release: 5125-05

For Release: October 5, 2005

U.S. COMMODITY FUTURES TRADING COMMISSION CHARGES TWO GEORGIA CORPORATIONS AND FIVE OTHERS IN $4.6 MILLION COMMODITY OPTIONS FRAUD SCHEME

CFTC Complaint Names American Derivatives Corp., Brokerage Management Corp., Layne David Gerstel, Devereux Decatur Booth, and David N. Mittler as Participants In Alleged Fraudulent Solicitations Of More Than 274 Customers

Futures Commission Merchants National Commodities Corp., Inc. and International Commodity Clearing, LLP Also Charged

WASHINGTON, D.C.—The U.S. Commodity Futures Trading Commission (CFTC) announced today the filing of a two-count complaint in the United States District Court for the Northern District of Georgia, charging American Derivatives Corp., a Georgia corporation, with fraudulently inducing customers to purchase options on commodity futures contracts (option contracts) and failing to supervise employees committing such fraud, in violation of the Commodity Exchange Act (CEA) and CFTC regulations. Also charged with fraud are Brokerage Management Corp. (Brokerage Management), the firm’s management company based in Atlanta, and American Derivatives’ employees Layne David Gerstel and Devereux Decatur Booth, both of Atlanta, and David N. Mittler of Aventura, Florida.

The complaint further charges guaranteeing futures commission merchants National Commodities Corp., Inc. (NCCI) and International Commodity Clearing, LLP (ICC) with liability for American Derivatives’ alleged violations. The court has issued a restraining order against all defendants -- except NCCI and ICC -- freezing assets and ordering the preservation of books and records.

The complaint alleges that starting in January 2004, American Derivatives, Brokerage Management, Mittler, Gerstel, and Booth engaged in a fraudulent scheme to solicit customers to trade commodity option contracts by making fraudulent misrepresentations and omissions of material facts, such as claims that: customers would double or triple their investments; seasonal trends, or known or expected events such as the war in Iraq, would cause predictable movements in the markets and that would enable customers to achieve high profits; and, there is little or no risk in trading option contracts through American Derivatives.

The complaint also alleges that American Derivatives, through its brokers, failed to advise customers, in light of the profit representations they made, that 97% of the firm’s customers lost money trading with American Derivatives.

According to the complaint, American Derivatives had guarantee agreements with NCCI, and later ICC, both futures commission merchants, and that NCCI and ICC, by reason of those guarantees, are liable for the wrongdoing alleged. The complaint also charges that defendant Brokerage Management actively manages American Derivatives’ finances, and therefore contributes to the success of the fraudulent scheme.

The CFTC complaint seeks a return of funds to injured customers, disgorgement of ill-gotten gains, the imposition of monetary penalties, and an order of a permanent injunction enjoining defendants from further commodity-related activity.

The following CFTC Division of Enforcement staff members are responsible for this case: Elizabeth Padgett, Jan M. Folena, Lacey Dingman, Richard Glaser, and Richard Wagner.

* * * * * * * * * * * * * *

The CFTC encourages members of the public to bring to our attention any suspicious activities involving futures or commodity options, including matters involving foreign currency (forex) investments or suspicious Internet websites.

You may contact the CFTC at 1-866-FON-CFTC (1-866-366-2382), visit us at our Customer Protection web page: (www.cftc.gov/cftc/cftccustomer.htm), or fill out our Internet Report Form identifying your concerns (www.cftc.gov/enfform.htm).

In addition, the CFTC publishes a series of Consumer Advisories at http://www.cftc.gov/cftc/cftccustomer.htm#advisory alerting the public to warning signs of possible fraudulent activity and offering precautions individuals should take before committing funds.

# # #

Media Contacts

Alan Sobba

(202) 418-5080

Dennis Holden

(202) 418-5088

CFTC Office of External Affairs

Washington, D.C.

Staff Contact

Richard Glaser

Associate Director

CFTC Division of Enforcement

(202) 418-5358

Related Documents

Complaint

Asset Freeze Order

--------------------------------------------------------------------------------

Updated October 6, 2005

 
Narrative for 0274641 - BOOTH, DEVEREAUX DECATUR
Commodity Futures Trading Commission

Office of External Affairs (202) 418-5080

Three Lafayette Centre

1155 21st Street, NW

Washington, DC 20581

Release: 5125-05

For Release: October 5, 2005

U.S. COMMODITY FUTURES TRADING COMMISSION CHARGES TWO GEORGIA CORPORATIONS AND FIVE OTHERS IN $4.6 MILLION COMMODITY OPTIONS FRAUD SCHEME

CFTC Complaint Names American Derivatives Corp., Brokerage Management Corp., Layne David Gerstel, Devereux Decatur Booth, and David N. Mittler as Participants In Alleged Fraudulent Solicitations Of More Than 274 Customers

Futures Commission Merchants National Commodities Corp., Inc. and International Commodity Clearing, LLP Also Charged

WASHINGTON, D.C.—The U.S. Commodity Futures Trading Commission (CFTC) announced today the filing of a two-count complaint in the United States District Court for the Northern District of Georgia, charging American Derivatives Corp., a Georgia corporation, with fraudulently inducing customers to purchase options on commodity futures contracts (option contracts) and failing to supervise employees committing such fraud, in violation of the Commodity Exchange Act (CEA) and CFTC regulations. Also charged with fraud are Brokerage Management Corp. (Brokerage Management), the firm’s management company based in Atlanta, and American Derivatives’ employees Layne David Gerstel and Devereux Decatur Booth, both of Atlanta, and David N. Mittler of Aventura, Florida.

The complaint further charges guaranteeing futures commission merchants National Commodities Corp., Inc. (NCCI) and International Commodity Clearing, LLP (ICC) with liability for American Derivatives’ alleged violations. The court has issued a restraining order against all defendants -- except NCCI and ICC -- freezing assets and ordering the preservation of books and records.

The complaint alleges that starting in January 2004, American Derivatives, Brokerage Management, Mittler, Gerstel, and Booth engaged in a fraudulent scheme to solicit customers to trade commodity option contracts by making fraudulent misrepresentations and omissions of material facts, such as claims that: customers would double or triple their investments; seasonal trends, or known or expected events such as the war in Iraq, would cause predictable movements in the markets and that would enable customers to achieve high profits; and, there is little or no risk in trading option contracts through American Derivatives.

The complaint also alleges that American Derivatives, through its brokers, failed to advise customers, in light of the profit representations they made, that 97% of the firm’s customers lost money trading with American Derivatives.

According to the complaint, American Derivatives had guarantee agreements with NCCI, and later ICC, both futures commission merchants, and that NCCI and ICC, by reason of those guarantees, are liable for the wrongdoing alleged. The complaint also charges that defendant Brokerage Management actively manages American Derivatives’ finances, and therefore contributes to the success of the fraudulent scheme.

The CFTC complaint seeks a return of funds to injured customers, disgorgement of ill-gotten gains, the imposition of monetary penalties, and an order of a permanent injunction enjoining defendants from further commodity-related activity.

The following CFTC Division of Enforcement staff members are responsible for this case: Elizabeth Padgett, Jan M. Folena, Lacey Dingman, Richard Glaser, and Richard Wagner.

* * * * * * * * * * * * * *

The CFTC encourages members of the public to bring to our attention any suspicious activities involving futures or commodity options, including matters involving foreign currency (forex) investments or suspicious Internet websites.

You may contact the CFTC at 1-866-FON-CFTC (1-866-366-2382), visit us at our Customer Protection web page: (www.cftc.gov/cftc/cftccustomer.htm), or fill out our Internet Report Form identifying your concerns (www.cftc.gov/enfform.htm).

In addition, the CFTC publishes a series of Consumer Advisories at http://www.cftc.gov/cftc/cftccustomer.htm#advisory alerting the public to warning signs of possible fraudulent activity and offering precautions individuals should take before committing funds.

# # #

Media Contacts

Alan Sobba

(202) 418-5080

Dennis Holden

(202) 418-5088

CFTC Office of External Affairs

Washington, D.C.

Staff Contact

Richard Glaser

Associate Director

CFTC Division of Enforcement

(202) 418-5358

Related Documents

Complaint

Asset Freeze Order

--------------------------------------------------------------------------------

Updated October 6, 2005

 
Narrative for 0362238 - BROKERAGE MANAGEMENT CORP
Commodity Futures Trading Commission

Office of External Affairs (202) 418-5080

Three Lafayette Centre

1155 21st Street, NW

Washington, DC 20581

Release: 5125-05

For Release: October 5, 2005

U.S. COMMODITY FUTURES TRADING COMMISSION CHARGES TWO GEORGIA CORPORATIONS AND FIVE OTHERS IN $4.6 MILLION COMMODITY OPTIONS FRAUD SCHEME

CFTC Complaint Names American Derivatives Corp., Brokerage Management Corp., Layne David Gerstel, Devereux Decatur Booth, and David N. Mittler as Participants In Alleged Fraudulent Solicitations Of More Than 274 Customers

Futures Commission Merchants National Commodities Corp., Inc. and International Commodity Clearing, LLP Also Charged

WASHINGTON, D.C.—The U.S. Commodity Futures Trading Commission (CFTC) announced today the filing of a two-count complaint in the United States District Court for the Northern District of Georgia, charging American Derivatives Corp., a Georgia corporation, with fraudulently inducing customers to purchase options on commodity futures contracts (option contracts) and failing to supervise employees committing such fraud, in violation of the Commodity Exchange Act (CEA) and CFTC regulations. Also charged with fraud are Brokerage Management Corp. (Brokerage Management), the firm’s management company based in Atlanta, and American Derivatives’ employees Layne David Gerstel and Devereux Decatur Booth, both of Atlanta, and David N. Mittler of Aventura, Florida.

The complaint further charges guaranteeing futures commission merchants National Commodities Corp., Inc. (NCCI) and International Commodity Clearing, LLP (ICC) with liability for American Derivatives’ alleged violations. The court has issued a restraining order against all defendants -- except NCCI and ICC -- freezing assets and ordering the preservation of books and records.

The complaint alleges that starting in January 2004, American Derivatives, Brokerage Management, Mittler, Gerstel, and Booth engaged in a fraudulent scheme to solicit customers to trade commodity option contracts by making fraudulent misrepresentations and omissions of material facts, such as claims that: customers would double or triple their investments; seasonal trends, or known or expected events such as the war in Iraq, would cause predictable movements in the markets and that would enable customers to achieve high profits; and, there is little or no risk in trading option contracts through American Derivatives.

The complaint also alleges that American Derivatives, through its brokers, failed to advise customers, in light of the profit representations they made, that 97% of the firm’s customers lost money trading with American Derivatives.

According to the complaint, American Derivatives had guarantee agreements with NCCI, and later ICC, both futures commission merchants, and that NCCI and ICC, by reason of those guarantees, are liable for the wrongdoing alleged. The complaint also charges that defendant Brokerage Management actively manages American Derivatives’ finances, and therefore contributes to the success of the fraudulent scheme.

The CFTC complaint seeks a return of funds to injured customers, disgorgement of ill-gotten gains, the imposition of monetary penalties, and an order of a permanent injunction enjoining defendants from further commodity-related activity.

The following CFTC Division of Enforcement staff members are responsible for this case: Elizabeth Padgett, Jan M. Folena, Lacey Dingman, Richard Glaser, and Richard Wagner.

* * * * * * * * * * * * * *

The CFTC encourages members of the public to bring to our attention any suspicious activities involving futures or commodity options, including matters involving foreign currency (forex) investments or suspicious Internet websites.

You may contact the CFTC at 1-866-FON-CFTC (1-866-366-2382), visit us at our Customer Protection web page: (www.cftc.gov/cftc/cftccustomer.htm), or fill out our Internet Report Form identifying your concerns (www.cftc.gov/enfform.htm).

In addition, the CFTC publishes a series of Consumer Advisories at http://www.cftc.gov/cftc/cftccustomer.htm#advisory alerting the public to warning signs of possible fraudulent activity and offering precautions individuals should take before committing funds.

# # #

Media Contacts

Alan Sobba

(202) 418-5080

Dennis Holden

(202) 418-5088

CFTC Office of External Affairs

Washington, D.C.

Staff Contact

Richard Glaser

Associate Director

CFTC Division of Enforcement

(202) 418-5358

Related Documents

Complaint

Asset Freeze Order

--------------------------------------------------------------------------------

Updated October 6, 2005

 
Narrative for 0277720 - GERSTEL, LAYNE DAVID
Commodity Futures Trading Commission

Office of External Affairs (202) 418-5080

Three Lafayette Centre

1155 21st Street, NW

Washington, DC 20581

Release: 5125-05

For Release: October 5, 2005

U.S. COMMODITY FUTURES TRADING COMMISSION CHARGES TWO GEORGIA CORPORATIONS AND FIVE OTHERS IN $4.6 MILLION COMMODITY OPTIONS FRAUD SCHEME

CFTC Complaint Names American Derivatives Corp., Brokerage Management Corp., Layne David Gerstel, Devereux Decatur Booth, and David N. Mittler as Participants In Alleged Fraudulent Solicitations Of More Than 274 Customers

Futures Commission Merchants National Commodities Corp., Inc. and International Commodity Clearing, LLP Also Charged

WASHINGTON, D.C.—The U.S. Commodity Futures Trading Commission (CFTC) announced today the filing of a two-count complaint in the United States District Court for the Northern District of Georgia, charging American Derivatives Corp., a Georgia corporation, with fraudulently inducing customers to purchase options on commodity futures contracts (option contracts) and failing to supervise employees committing such fraud, in violation of the Commodity Exchange Act (CEA) and CFTC regulations. Also charged with fraud are Brokerage Management Corp. (Brokerage Management), the firm’s management company based in Atlanta, and American Derivatives’ employees Layne David Gerstel and Devereux Decatur Booth, both of Atlanta, and David N. Mittler of Aventura, Florida.

The complaint further charges guaranteeing futures commission merchants National Commodities Corp., Inc. (NCCI) and International Commodity Clearing, LLP (ICC) with liability for American Derivatives’ alleged violations. The court has issued a restraining order against all defendants -- except NCCI and ICC -- freezing assets and ordering the preservation of books and records.

The complaint alleges that starting in January 2004, American Derivatives, Brokerage Management, Mittler, Gerstel, and Booth engaged in a fraudulent scheme to solicit customers to trade commodity option contracts by making fraudulent misrepresentations and omissions of material facts, such as claims that: customers would double or triple their investments; seasonal trends, or known or expected events such as the war in Iraq, would cause predictable movements in the markets and that would enable customers to achieve high profits; and, there is little or no risk in trading option contracts through American Derivatives.

The complaint also alleges that American Derivatives, through its brokers, failed to advise customers, in light of the profit representations they made, that 97% of the firm’s customers lost money trading with American Derivatives.

According to the complaint, American Derivatives had guarantee agreements with NCCI, and later ICC, both futures commission merchants, and that NCCI and ICC, by reason of those guarantees, are liable for the wrongdoing alleged. The complaint also charges that defendant Brokerage Management actively manages American Derivatives’ finances, and therefore contributes to the success of the fraudulent scheme.

The CFTC complaint seeks a return of funds to injured customers, disgorgement of ill-gotten gains, the imposition of monetary penalties, and an order of a permanent injunction enjoining defendants from further commodity-related activity.

The following CFTC Division of Enforcement staff members are responsible for this case: Elizabeth Padgett, Jan M. Folena, Lacey Dingman, Richard Glaser, and Richard Wagner.

* * * * * * * * * * * * * *

The CFTC encourages members of the public to bring to our attention any suspicious activities involving futures or commodity options, including matters involving foreign currency (forex) investments or suspicious Internet websites.

You may contact the CFTC at 1-866-FON-CFTC (1-866-366-2382), visit us at our Customer Protection web page: (www.cftc.gov/cftc/cftccustomer.htm), or fill out our Internet Report Form identifying your concerns (www.cftc.gov/enfform.htm).

In addition, the CFTC publishes a series of Consumer Advisories at http://www.cftc.gov/cftc/cftccustomer.htm#advisory alerting the public to warning signs of possible fraudulent activity and offering precautions individuals should take before committing funds.

# # #

Media Contacts

Alan Sobba

(202) 418-5080

Dennis Holden

(202) 418-5088

CFTC Office of External Affairs

Washington, D.C.

Staff Contact

Richard Glaser

Associate Director

CFTC Division of Enforcement

(202) 418-5358

Related Documents

Complaint

Asset Freeze Order

--------------------------------------------------------------------------------

Updated October 6, 2005

 
Narrative for 0342033 - INTERNATIONAL COMMODITY CLEARING
Commodity Futures Trading Commission

Office of External Affairs (202) 418-5080

Three Lafayette Centre

1155 21st Street, NW

Washington, DC 20581

Release: 5125-05

For Release: October 5, 2005

U.S. COMMODITY FUTURES TRADING COMMISSION CHARGES TWO GEORGIA CORPORATIONS AND FIVE OTHERS IN $4.6 MILLION COMMODITY OPTIONS FRAUD SCHEME

CFTC Complaint Names American Derivatives Corp., Brokerage Management Corp., Layne David Gerstel, Devereux Decatur Booth, and David N. Mittler as Participants In Alleged Fraudulent Solicitations Of More Than 274 Customers

Futures Commission Merchants National Commodities Corp., Inc. and International Commodity Clearing, LLP Also Charged

WASHINGTON, D.C.—The U.S. Commodity Futures Trading Commission (CFTC) announced today the filing of a two-count complaint in the United States District Court for the Northern District of Georgia, charging American Derivatives Corp., a Georgia corporation, with fraudulently inducing customers to purchase options on commodity futures contracts (option contracts) and failing to supervise employees committing such fraud, in violation of the Commodity Exchange Act (CEA) and CFTC regulations. Also charged with fraud are Brokerage Management Corp. (Brokerage Management), the firm’s management company based in Atlanta, and American Derivatives’ employees Layne David Gerstel and Devereux Decatur Booth, both of Atlanta, and David N. Mittler of Aventura, Florida.

The complaint further charges guaranteeing futures commission merchants National Commodities Corp., Inc. (NCCI) and International Commodity Clearing, LLP (ICC) with liability for American Derivatives’ alleged violations. The court has issued a restraining order against all defendants -- except NCCI and ICC -- freezing assets and ordering the preservation of books and records.

The complaint alleges that starting in January 2004, American Derivatives, Brokerage Management, Mittler, Gerstel, and Booth engaged in a fraudulent scheme to solicit customers to trade commodity option contracts by making fraudulent misrepresentations and omissions of material facts, such as claims that: customers would double or triple their investments; seasonal trends, or known or expected events such as the war in Iraq, would cause predictable movements in the markets and that would enable customers to achieve high profits; and, there is little or no risk in trading option contracts through American Derivatives.

The complaint also alleges that American Derivatives, through its brokers, failed to advise customers, in light of the profit representations they made, that 97% of the firm’s customers lost money trading with American Derivatives.

According to the complaint, American Derivatives had guarantee agreements with NCCI, and later ICC, both futures commission merchants, and that NCCI and ICC, by reason of those guarantees, are liable for the wrongdoing alleged. The complaint also charges that defendant Brokerage Management actively manages American Derivatives’ finances, and therefore contributes to the success of the fraudulent scheme.

The CFTC complaint seeks a return of funds to injured customers, disgorgement of ill-gotten gains, the imposition of monetary penalties, and an order of a permanent injunction enjoining defendants from further commodity-related activity.

The following CFTC Division of Enforcement staff members are responsible for this case: Elizabeth Padgett, Jan M. Folena, Lacey Dingman, Richard Glaser, and Richard Wagner.

* * * * * * * * * * * * * *

The CFTC encourages members of the public to bring to our attention any suspicious activities involving futures or commodity options, including matters involving foreign currency (forex) investments or suspicious Internet websites.

You may contact the CFTC at 1-866-FON-CFTC (1-866-366-2382), visit us at our Customer Protection web page: (www.cftc.gov/cftc/cftccustomer.htm), or fill out our Internet Report Form identifying your concerns (www.cftc.gov/enfform.htm).

In addition, the CFTC publishes a series of Consumer Advisories at http://www.cftc.gov/cftc/cftccustomer.htm#advisory alerting the public to warning signs of possible fraudulent activity and offering precautions individuals should take before committing funds.

# # #

Media Contacts

Alan Sobba

(202) 418-5080

Dennis Holden

(202) 418-5088

CFTC Office of External Affairs

Washington, D.C.

Staff Contact

Richard Glaser

Associate Director

CFTC Division of Enforcement

(202) 418-5358

Related Documents

Complaint

Asset Freeze Order

--------------------------------------------------------------------------------

Updated October 6, 2005

 
Narrative for 0272801 - MITTLER, DAVID N
Commodity Futures Trading Commission

Office of External Affairs (202) 418-5080

Three Lafayette Centre

1155 21st Street, NW

Washington, DC 20581

Release: 5125-05

For Release: October 5, 2005

U.S. COMMODITY FUTURES TRADING COMMISSION CHARGES TWO GEORGIA CORPORATIONS AND FIVE OTHERS IN $4.6 MILLION COMMODITY OPTIONS FRAUD SCHEME

CFTC Complaint Names American Derivatives Corp., Brokerage Management Corp., Layne David Gerstel, Devereux Decatur Booth, and David N. Mittler as Participants In Alleged Fraudulent Solicitations Of More Than 274 Customers

Futures Commission Merchants National Commodities Corp., Inc. and International Commodity Clearing, LLP Also Charged

WASHINGTON, D.C.—The U.S. Commodity Futures Trading Commission (CFTC) announced today the filing of a two-count complaint in the United States District Court for the Northern District of Georgia, charging American Derivatives Corp., a Georgia corporation, with fraudulently inducing customers to purchase options on commodity futures contracts (option contracts) and failing to supervise employees committing such fraud, in violation of the Commodity Exchange Act (CEA) and CFTC regulations. Also charged with fraud are Brokerage Management Corp. (Brokerage Management), the firm’s management company based in Atlanta, and American Derivatives’ employees Layne David Gerstel and Devereux Decatur Booth, both of Atlanta, and David N. Mittler of Aventura, Florida.

The complaint further charges guaranteeing futures commission merchants National Commodities Corp., Inc. (NCCI) and International Commodity Clearing, LLP (ICC) with liability for American Derivatives’ alleged violations. The court has issued a restraining order against all defendants -- except NCCI and ICC -- freezing assets and ordering the preservation of books and records.

The complaint alleges that starting in January 2004, American Derivatives, Brokerage Management, Mittler, Gerstel, and Booth engaged in a fraudulent scheme to solicit customers to trade commodity option contracts by making fraudulent misrepresentations and omissions of material facts, such as claims that: customers would double or triple their investments; seasonal trends, or known or expected events such as the war in Iraq, would cause predictable movements in the markets and that would enable customers to achieve high profits; and, there is little or no risk in trading option contracts through American Derivatives.

The complaint also alleges that American Derivatives, through its brokers, failed to advise customers, in light of the profit representations they made, that 97% of the firm’s customers lost money trading with American Derivatives.

According to the complaint, American Derivatives had guarantee agreements with NCCI, and later ICC, both futures commission merchants, and that NCCI and ICC, by reason of those guarantees, are liable for the wrongdoing alleged. The complaint also charges that defendant Brokerage Management actively manages American Derivatives’ finances, and therefore contributes to the success of the fraudulent scheme.

The CFTC complaint seeks a return of funds to injured customers, disgorgement of ill-gotten gains, the imposition of monetary penalties, and an order of a permanent injunction enjoining defendants from further commodity-related activity.

The following CFTC Division of Enforcement staff members are responsible for this case: Elizabeth Padgett, Jan M. Folena, Lacey Dingman, Richard Glaser, and Richard Wagner.

* * * * * * * * * * * * * *

The CFTC encourages members of the public to bring to our attention any suspicious activities involving futures or commodity options, including matters involving foreign currency (forex) investments or suspicious Internet websites.

You may contact the CFTC at 1-866-FON-CFTC (1-866-366-2382), visit us at our Customer Protection web page: (www.cftc.gov/cftc/cftccustomer.htm), or fill out our Internet Report Form identifying your concerns (www.cftc.gov/enfform.htm).

In addition, the CFTC publishes a series of Consumer Advisories at http://www.cftc.gov/cftc/cftccustomer.htm#advisory alerting the public to warning signs of possible fraudulent activity and offering precautions individuals should take before committing funds.

# # #

Media Contacts

Alan Sobba

(202) 418-5080

Dennis Holden

(202) 418-5088

CFTC Office of External Affairs

Washington, D.C.

Staff Contact

Richard Glaser

Associate Director

CFTC Division of Enforcement

(202) 418-5358

Related Documents

Complaint

Asset Freeze Order

--------------------------------------------------------------------------------

Updated October 6, 2005

 
Narrative for 0278238 - NATIONAL COMMODITIES CORPORATION INC
Commodity Futures Trading Commission

Office of External Affairs (202) 418-5080

Three Lafayette Centre

1155 21st Street, NW

Washington, DC 20581

Release: 5125-05

For Release: October 5, 2005

U.S. COMMODITY FUTURES TRADING COMMISSION CHARGES TWO GEORGIA CORPORATIONS AND FIVE OTHERS IN $4.6 MILLION COMMODITY OPTIONS FRAUD SCHEME

CFTC Complaint Names American Derivatives Corp., Brokerage Management Corp., Layne David Gerstel, Devereux Decatur Booth, and David N. Mittler as Participants In Alleged Fraudulent Solicitations Of More Than 274 Customers

Futures Commission Merchants National Commodities Corp., Inc. and International Commodity Clearing, LLP Also Charged

WASHINGTON, D.C.—The U.S. Commodity Futures Trading Commission (CFTC) announced today the filing of a two-count complaint in the United States District Court for the Northern District of Georgia, charging American Derivatives Corp., a Georgia corporation, with fraudulently inducing customers to purchase options on commodity futures contracts (option contracts) and failing to supervise employees committing such fraud, in violation of the Commodity Exchange Act (CEA) and CFTC regulations. Also charged with fraud are Brokerage Management Corp. (Brokerage Management), the firm’s management company based in Atlanta, and American Derivatives’ employees Layne David Gerstel and Devereux Decatur Booth, both of Atlanta, and David N. Mittler of Aventura, Florida.

The complaint further charges guaranteeing futures commission merchants National Commodities Corp., Inc. (NCCI) and International Commodity Clearing, LLP (ICC) with liability for American Derivatives’ alleged violations. The court has issued a restraining order against all defendants -- except NCCI and ICC -- freezing assets and ordering the preservation of books and records.

The complaint alleges that starting in January 2004, American Derivatives, Brokerage Management, Mittler, Gerstel, and Booth engaged in a fraudulent scheme to solicit customers to trade commodity option contracts by making fraudulent misrepresentations and omissions of material facts, such as claims that: customers would double or triple their investments; seasonal trends, or known or expected events such as the war in Iraq, would cause predictable movements in the markets and that would enable customers to achieve high profits; and, there is little or no risk in trading option contracts through American Derivatives.

The complaint also alleges that American Derivatives, through its brokers, failed to advise customers, in light of the profit representations they made, that 97% of the firm’s customers lost money trading with American Derivatives.

According to the complaint, American Derivatives had guarantee agreements with NCCI, and later ICC, both futures commission merchants, and that NCCI and ICC, by reason of those guarantees, are liable for the wrongdoing alleged. The complaint also charges that defendant Brokerage Management actively manages American Derivatives’ finances, and therefore contributes to the success of the fraudulent scheme.

The CFTC complaint seeks a return of funds to injured customers, disgorgement of ill-gotten gains, the imposition of monetary penalties, and an order of a permanent injunction enjoining defendants from further commodity-related activity.

The following CFTC Division of Enforcement staff members are responsible for this case: Elizabeth Padgett, Jan M. Folena, Lacey Dingman, Richard Glaser, and Richard Wagner.

* * * * * * * * * * * * * *

The CFTC encourages members of the public to bring to our attention any suspicious activities involving futures or commodity options, including matters involving foreign currency (forex) investments or suspicious Internet websites.

You may contact the CFTC at 1-866-FON-CFTC (1-866-366-2382), visit us at our Customer Protection web page: (www.cftc.gov/cftc/cftccustomer.htm), or fill out our Internet Report Form identifying your concerns (www.cftc.gov/enfform.htm).

In addition, the CFTC publishes a series of Consumer Advisories at http://www.cftc.gov/cftc/cftccustomer.htm#advisory alerting the public to warning signs of possible fraudulent activity and offering precautions individuals should take before committing funds.

# # #

Media Contacts

Alan Sobba

(202) 418-5080

Dennis Holden

(202) 418-5088

CFTC Office of External Affairs

Washington, D.C.

Staff Contact

Richard Glaser

Associate Director

CFTC Division of Enforcement

(202) 418-5358

Related Documents

Complaint

Asset Freeze Order

--------------------------------------------------------------------------------

Updated October 6, 2005