The U.S. Commodity Futures Trading Commission (CFTC) announced that Judge Jose E. Martinez of the U.S. District Court for the Southern District of Florida entered a Consent Order against North American Asset Management, LLC (NAAM) of Fort Lauderdale, Florida, its owner and president Alexi Bethel of Miami, Florida, and its owner and managing director Steven Labadie of Lake Worth, Florida.” A statement from the Commodities Futures Trading Commission (CFTC) stated. The Order finds that NAAM, Bethel, and Labadie engaged in illegal, off-exchange transactions in precious metals with retail customers on a leveraged, margined, or financed basis and requires them, jointly and severally, to pay restitution of $648,759.60 and a $977,430.47 civil monetary penalty.”
The CFTC initially brought the complaint.
“According to the Order, from March 2012 through at least March 2013, NAAM, by and through its employees, including Bethel and Labadie, solicited retail customers by telephone to engage in leveraged, margined, or financed precious metals transactions. During that period, NAAM’s customers paid at least $2.5 million to NAAM in connection with precious metals transactions, and NAAM received commissions and fees totalling at least $648,759.60. The Order also finds that NAAM accepted customer orders and funds and therefore acted as a Futures Commission Merchant (FCM), without registering as such with the CFTC.” The CFTC also stated.
The announcement comes on the heels of the announcement of a plea deal earlier this month in another off-exchange precious metals case.
David Liew pled guilty in what might be the beginning of a larger case of widespread trading irregularities in the precious metals market.
“LIEW was supervised by and interacted with more experienced traders on the team. LIEW was supervised by other metals traders in the Asia-Pacific region, and, due to the nature of the nearly 24-hour trading cycle, LIEW interacted with members of the trading team in the United States and the United Kingdom. It was after joining the metals trading desk that LIEW was taught to spoof by other metals traders, including other metals traders at Bank A.” That plea agreement stated.
The CFTC also noted its previously released precious metals fraud alert; the alert noted these red flags.
- Dangling the prospect of wealth and enticing you with something you want, but can’t have. This gold purchase is guaranteed to rise double what your current investments are doing.”
- Trying to build credibility by claiming to be with a reputable firm or to have a special credential or experience.
“Believe me, as a senior vice president of XYZ Metals Merchant Inc., I would never sell an investment that doesn’t produce.”
- Leading you to believe that other savvy investors have already invested.
“This is how Bob down your street got his start. I know it’s a lot of money, but I’m in and so is half our club.”
- Offering to do a small favour for you in return for a big favour.
“I’ll give you a break on my commission if you buy now—half off.”
- Creating a false sense of urgency by claiming limited supply.
“There are only two units left and the Asian market is about to open, so I’d sign up today.