IN THE UNITED STATES DISTRICT COURT 

FOR THE SOUTHERN DISTRICT OF FLORIDA 

Case No.: 12-CV-81311-Middlebrooks/Brannon 

UNITED STATES COMMODITY FUTURES 

TRADING COMMISSION, 

 Plaintiff, 

 v. 

HUNTER WISE COMMODITIES, LLC, 

HUNTER WISE SERVICES, LLC, HUNTER 

WISE CREDIT, LLC, HUNTER WISE 

TRADING, LLC, LLOYDS COMMODITIES, 

LLC, LLOYDS COMMODITIES CREDIT 

COMPANY, LLC, LLOYDS SERVICES, 

LLC, C.D. HOPKINS FINANCIAL, LLC, 

HARD ASSET LENDING GROUP, LLC, 

BLACKSTONE METALS GROUP, LLC, 

NEWBRIDGE ALLIANCE, INC., UNITED 

STATES CAPITAL TRUST, LLC, HAROLD 

EDWARD MARTIN, JR., FRED JAGER, 

JAMES BURBAGE, FRANK GAUDINO, 

BARIS KESER, CHADEWICK HOPKINS, 

JOHN KING, and DAVID A. MOORE, 

 

 Defendants. 

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PLAINTIFF’S MOTION FOR AN ORDER OF PRELIMINARY INJUNCTION AND 

MEMORANDUM IN SUPPORT THEREOF 

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TABLE OF CONTENTS 

I. INTRODUCTION............................................................................................................. 1

II. DEFENDANTS’ ILLEGAL RETAIL COMMODITY TRANSACTIONS FALL 

WITHIN THE CFTC’S JURISDICTION ...................................................................... 3

A. Overview of Defendants’ Illegal Retail Commodity Transactions ......................... 3

B. Defendants’ Roles in the Scheme ........................................................................... 4

C. Defendants’ Lack of Physical Metals ..................................................................... 5

D. Defendants’ Retail Commodity Transactions Are Within The CFTC’s 

Jurisdiction Under Section 2(c)(2)(D) of the Commodity Exchange Act. ............. 7

E. The Actual Delivery Exception .............................................................................. 8

F. Defendants Do Not Actually Deliver Any Metals In Connection With Their 

Retail Commodity Transactions. ............................................................................ 9

III. THE CFTC IS ENTITLED TO A PRELIMINARY INJUNCTION ......................... 10

IV. DEFENDANTS HAVE VIOLATED AND CONTINUE TO VIOLATE THE 

COMMODITY EXCHANGE ACT .............................................................................. 12

A. Each of the Defendants Violated Section 4(a) of the Commodity Exchange 

Act ......................................................................................................................... 12

B. Defendants’ Fraud Violates Sections 4b and 6(c)(1) of the Commodity 

Exchange Act, and CFTC Regulation 180.1. ........................................................ 13

1. Defendants Made Misrepresentations And Omissions ............................. 14

2. Defendants Acted With Scienter ............................................................... 15

3. Defendants’ Misrepresentations Were Material ....................................... 17

C. The Court Should Issue A Preliminary Injunction Against the Individual 

Defendants ............................................................................................................ 18

1. Each Individual Defendant Controlled at Least One Corporate 

Defendant .................................................................................................. 18

2. Each Individual Defendant Knowingly Induced the Unlawful 

Conduct ..................................................................................................... 19

V. CONCLUSION ............................................................................................................... 20

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I. INTRODUCTION 

The sale of commodities, including physical metals such as gold, silver, platinum, 

palladium and copper, to retail customers1

 in off-exchange financed transactions was made 

illegal by Section 742 of the Dodd Frank Act of 2010. Passed in July 2010, and effective 

July 16, 2011, the Dodd-Frank Act amended the Commodity Exchange Act (the “Act”) to 

prohibit entering into, or offering to, retail customers, any agreement, contract or transaction in 

any commodity on a leveraged, margined or financed basis (“retail commodity transactions”), 

unless such a transaction is conducted on a regulated commodities exchange. Defendants have 

violated, are violating, and will continue to violate this prohibition because they offer or enter 

into retail commodity transactions that are not offered or entered into on a regulated, transparent 

and competitive commodity exchange. 

In addition, Defendants make three highly material misrepresentations to retail customers 

when pitching physical precious metal as an investment. Defendants claim to: (1) sell and 

transfer ownership of physical metals to customers; (2) make loans to customers to purchase the 

physical metals; and (3) store customers’ physical metals in independent depositories. 

Defendants impress upon retail customers that they are not selling stock in metal companies or 

exchange-traded commodity futures that exist only on paper, but real, tangible, metal. In fact, 

defendants’ retail commodity transactions are a sham. Defendants do not own, possess or store 

the physical metals they purport to sell to retail customers. Defendants do not transfer ownership 

of, or title to, any metals. Defendants do not make any loans. Defendants do not store physical 

metals in any depositories for customers. In short, there is no metal held in the customers’ 

names, and in the event of Defendants’ insolvency the retail customers holding “positions” with 

Defendants have no recourse. 

The scope of Defendants’ illegal activity is significant. Between July 16, 2011 and 

August 31, 2012 alone, Defendant Hunter Wise2

 took in more than $46 million in retail customer 

 

1

 For purposes of this action a “retail customer” is a person that is not an Eligible Contract 

Participant (“non-ECP”) as defined at section 1a(18)(A)(xi) of the Commodity Exchange Act, 

7 U.S.C. § 1a(18)(A)(xi). Defendants’ retail customers do not have the $5 million or more 

invested on a discretionary basis that is required to be an ECP. 

2

 Defendants Hunter Wise Commodities, LLC and its subsidiaries, Hunter Wise Credit, LLC, 

Hunter Wise Trading, LLC, and Hunter Wise Services, LLC, and their principals, Harold 

Edward Martin and Fred Jager, are described collectively as “Hunter Wise” herein. Each Hunter 

Wise entity is commonly controlled by Martin and Jager. They share resources, including office 

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funds that it received from dozens of telemarketing firms that hold themselves out as metals 

dealers, including Defendants CD Hopkins, Blackstone, Newbridge and USCT (the “Dealer 

Defendants”).3

 Defendant Lloyds, an intermediary between Hunter Wise and numerous dealers, 

including the Dealer Defendants, was the most significant aggregator for Hunter Wise of retail 

customer funds from the illegal retail commodity transactions.4

 Between July 2011 and March 

31, 2012 alone, Lloyds funneled nearly $15 million from telemarketing firms to Hunter Wise. 

The illegal conduct at issue in this action occurs nationwide, but much of that activity 

takes place in the Southern District of Florida. Lloyds is based in Palm Beach Gardens, Florida, 

and at least 17 telemarketing firms that have sent funds through Lloyds to Hunter Wise solicited 

customers from offices within the district. Each of the four Dealer Defendants solicited 

customers from offices in the Southern District of Florida. 

The U.S. Commodity Futures Trading Commission (“CFTC”) hereby moves for a 

preliminary injunction pursuant to Section 6c(a) of the Act, 7 U.S.C. § 13a-1(a), to halt 

Defendants’ offer and execution of illegal retail commodity transactions. Section 6c(a) 

authorizes the CFTC to seek injunctive relief in federal court whenever it appears that a person 

or entity has engaged, is engaging, or is about to engage in any act or practice that violates the 

Act or the CFTC’s regulations.5

 

space and employees, and function to achieve a single common purpose. They are operated as a 

single common enterprise. 

3

 As described in the Complaint filed in this action, “CD Hopkins” includes C. D. Hopkins 

Financial, LLC d/b/a C. D. Hopkins Metals Division, Hard Asset Lending Group, LLC, and 

Chadewick Hopkins, the sole principal of those firms. “Blackstone” includes Blackstone Metals 

Group, LLC and its principal Baris Keser. “Newbridge” includes Newbridge Alliance, Inc. and 

its principal John King. “USCT” includes United States Capital Trust, LLC and its principal 

David Moore. Each of these Dealer Defendants is owned and operated by its principal and has 

very little capital and few assets. Johnson Declaration, ¶¶ 24-35. 

4

 Defendants Lloyds Commodities, LLC, and its subsidiaries Lloyds Commodities Credit 

Company, LLC, and Lloyds Commodities Services, LLC, and their principals, James Burbage 

and Frank Gaudino are described collectively as “Lloyds” herein. Each Lloyds entity is 

commonly controlled by Burbage and Gaudino, shares resources, including office space and 

employees, and function to achieve a single common purpose. Johnson Declaration, ¶¶ 18-20. 

They are operated as a single enterprise. 

5

 The CFTC submits in support of this Motion an Appendix of declarations, exhibits, and 

testimony. References to declaration paragraphs appear, for example, as follows: Johnson Dec. ¶ 

_. References to declaration exhibits appear, for example, as follows: Johnson Ex. _. 

References to transcripts of testimony appear, for example as follows: Shoemaker Trans. _. 

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II. DEFENDANTS’ ILLEGAL RETAIL COMMODITY TRANSACTIONS FALL 

WITHIN THE CFTC’S JURISDICTION 

The CFTC conducted a detailed investigation of Defendants’ business operations and 

specifically the financed commodity transactions they offer to retail customers. The CFTC’s 

staff collected and reviewed thousands of documents, took sworn testimony, and interviewed 

numerous customers. The CFTC offered Defendants an opportunity to provide evidence and 

legal arguments regarding the applicability of the Act to Defendants’ transactions. Only Hunter 

Wise made a detailed submission. Hunter Wise argued primarily that the CFTC lacks 

jurisdiction over Defendants’ retail commodity transactions. Therefore, the CFTC will first 

explain why Defendants’ transactions are subject to its jurisdiction and illegal as of July 16 

before addressing the propriety of a preliminary injunction to enjoin Defendants’ illegal and 

fraudulent activities. 

A. Overview of Defendants’ Illegal Retail Commodity Transactions 

Dealer Defendants solicit retail customers through their websites and by phone to enter 

into financed purchases and sales of what Dealer Defendants describe as “physical” metals.6

 

Customers sign account agreements or applications with the Dealer Defendants which say that 

the dealers will loan funds for the purchase of physical metals, and that the dealers will store 

these physical metals for the customer.7 

After opening an account and depositing funds with Dealer Defendants, customers 

acquire “trading positions” to speculate on the price movement of metals. Customer accounts 

are valued on a daily basis, and the equity in their accounts increases or decreases as metals 

prices fluctuate. However, the customer’s account equity is also reduced on a daily basis by 

interest and service fees. Customers typically begin trading with an equity position of 25% of 

the value of the metals being traded. When a customer’s equity falls below 15%, the customer 

receives a margin call that requires the customer to deposit additional funds in order to maintain 

the trading position. If the customer’s equity drops to 9%, any open trading positions are closed 

out to bring the dollar value of the equity above 15%.8

 

 

6 Johnson Dec. ¶¶ 80, 81, 85 and 90, and Exs. GGG, KKK, OOO; Christianson Dec. Exs. A-D. 

7 Johnson Dec. ¶¶ 72, 77 and Exs. AAA, EEE; Wimberly Dec. Ex. C; Toll Dec. Ex. A. 

8 Johnson Dec. Ex. PP, Appx p. 581 (references to specific pages of the Appendix are identified 

as “Appx p._.) 

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Customers are charged substantial fees, making the likelihood of profit low. The fees 

include a commission (up to 38% of the initial customer deposit in a single trade), a price spread 

(a 3-5% mark-up or mark-down from the current price of the metal), interest on the purported 

loan (at an annual rate of approximately 9.5%) and service fees (approximately 7% annually on 

the total market value of the account) until the trading position is offset.9

 Dealer Defendants 

keep the commission, and Hunter Wise and Lloyds split the remaining fees with the Dealer 

Defendants.10 

B. Defendants’ Roles in the Scheme 

Each of the Defendants plays a role. The Dealer Defendants collect retail customer funds 

and send them on to Hunter Wise via Lloyds.11 Once the dealer successfully solicits a 

customer’s order, that dealer contacts Lloyds, which accepts the customer’s order and relays it on 

to Hunter Wise. Hunter Wise provides Lloyds with a price for the trade along with a trade 

confirmation number, which Lloyds then relays back to the dealer. Either Lloyds or the dealer 

then links the trade confirmation number with the customer within the Hunter Wise database 

system.12 Hunter Wise maintains the database of transactional information that tracks all 

customer orders and trading positions.13 Hunter Wise also maintains retail customer funds in its 

bank and trading accounts, and accounts for those funds through its database system. 

Despite the façade presented by Dealer Defendants that they are metals dealers, and 

unbeknownst to the retail customer, Hunter Wise orchestrates all aspects of Dealer Defendants’ 

business apart from the telemarketing solicitations.14 Hunter Wise’s elaborate internet-based 

“portal” system tracks and records all customer transactions, provides its dealers and retail 

customers with internet-based access to their account and transactional information, and provides 

dealers with various reports and data on the retail customers’ transactions.15 Customers are able 

 

9 Johnson Dec. ¶ 70 and Ex. ZZ. 

10 Johnson Dec. ¶ 53 and Ex. CC. 

11 Johnson Dec. ¶¶ 4j, 44. 

12 Shoemaker Trans. pp. 64-69, Appx pp. 1315-1316; Morales Trans., p. 36-37 and 92-93, Appx 

pp. 1321-1322 and 1328-1329. 

13 Johnson Dec. ¶ 54 and Ex. PP, Appx. p. 559. 

14 Johnson Dec. ¶ 53-61 and Exs. CC, and PP-TT. 

15 Id. at Ex. PP, Appx. p. 562. 

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to log in to view their account and transaction information online by following a link on the 

dealer’s website to a separate website that appears to be a part of the dealer’s website, but is in 

fact a website built and maintained by Hunter Wise.16 The Dealer Defendants are able to log in 

to the portal as well to view account and transactional information for the customers they 

solicited, as well as detailed performance reports relating to these customer accounts. Hunter 

Wise generates account documents from its database – including trade confirmations, monthly 

account statements, and “Transfer of Commodity” forms – all on the Dealer Defendant’s 

letterhead.17 Thus, although the customers’ account documents are automatically generated by 

Hunter Wise (and in many cases transmitted electronically directly by Hunter Wise to retail 

customers), they appear to be generated by the Dealer Defendants.18

Lloyds’ role is to recruit telemarketing firms (including the Dealer Defendants) to solicit 

retail customers to execute retail commodity transactions through Hunter Wise, and to relay 

customer funds and orders between these telemarketing firms and Hunter Wise.19 Lloyds makes 

money by taking a percentage of the price spread, interest, and service fees charged on retail 

customer accounts.20

C. Defendants’ Lack of Physical Metals 

In the end, Defendants operate a multi-tiered scheme involving off-exchange, paperbased speculative trading in commodities. None of the Defendants possesses or actually delivers 

physical metals to customers in their retail commodity transactions. At the top tier of the 

scheme, Hunter Wise does not actually buy, sell, loan, store, or transfer any physical metals in 

connection with its retail commodity transactions.21 Instead, Hunter Wise simply makes an 

internal accounting entry on its own books and tracks the value of each retail customer’s account 

on a daily basis.22 

 

16 Christianson Dec., ¶ 6 and Ex. E; Johnson Dec. ¶ 55. 

17 Johnson Dec. Ex. PP, Appx. p. 570. 

18 Id. at Appx. p. 559. 

19 Morales Trans. pp. 88-94, Appx. p. 1327-29. 

20 Johnson Dec. ¶ 68. 

21 Gjerdrum (A-Mark) Dec., ¶ 8, 13, 14; Maartens (Standard Bank) Dec., ¶¶ 13 - 15; Johnson 

Dec., ¶ 49-50. 

22 Shoemaker Trans. pp. 65-69, Appx. pp 1316-17. 

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Hunter Wise manages its exposure to retail customer trading positions by trading 

derivatives in its own over-the-counter margin trading accounts. Hunter Wise pools the funds it 

receives from Lloyds and other retail dealers (including the Dealer Defendants) in its own bank 

accounts.23 Hunter Wise then transfers a portion of those pooled funds to its own margin trading 

accounts at (1) A-Mark Precious Metals, Inc. (“A-Mark”); (2) Standard Bank Plc; (“Standard 

Bank”); (3) Natixis Commodity Markets Ltd. (“Natixis”); (4) R.J. O’Brien; and (5) OANDA. 

The trades that Hunter Wise places in these accounts do not result in the transfer or delivery of 

any metals.24 Hunter Wise has never taken delivery of any metals as a result of the trades placed 

in these accounts.25 

Representatives of both A-Mark and Standard Bank, where Hunter Wise maintained its 

two largest trading accounts since July 2011, testified that these companies do not maintain an 

inventory of physical metals for Hunter Wise or any customers of Hunter Wise,26 that Hunter 

Wise has never taken delivery of physical metals as a result of trades in its account,27 and that 

Hunter Wise does not receive title to any physical metals as a result of trades in these accounts.28 

Natixis representatives confirmed that the Hunter Wise account at Natixis functions in a similar 

fashion.29 Hunter Wise’s trades in its margin trading accounts do not involve the transfer or 

delivery of physical metals. These firms only offer Hunter Wise over-the-counter margin trading 

facilities, not the purchase, sale or storage of physical metals for Hunter Wise or its customers. 

 

23 Johnson Dec. ¶ 44. 

24 Gjerdrum (A-Mark) Dec. ¶¶ 8, 13, 14; Maartens (Standard Bank) Dec. ¶¶ 13 – 15; Johnson 

Dec. ¶¶ 49-50. 

25 Id. 

26 Gjerdrum (A-Mark) Dec. ¶ 14 (“A-Mark does not store any metals for Hunter Wise or its 

customers in connection with Hunter Wise’s margin trades.”); Maartens (Standard Bank) Dec. ¶ 

13 (“Standard Bank does not . . . store any physical metals for Hunter Wise or for the benefit of 

any Hunter Wise customer in connection with Hunter Wise’s margin trades.”) 

27 Gjerdrum Dec. ¶ 13 (“Margin trades are financially settled transactions, meaning that they do 

not involve the delivery of any metals.”); Maartens (Standard) Dec. ¶ 13 (“Standard Bank has 

not delivered any physical metals to Hunter Wise.”). 

28 Gjerdrum Dec. ¶ 14 (“A-Mark does not transfer title to any metals to Hunter Wise as a result 

of margin trades. Hunter Wise does not own any metals as a result of its margin trades with AMark.); Maartens (Standard) Dec. ¶ 14 (“Standard Bank does not transfer title to any metals to 

Hunter Wise as a result of margin trades.”) 

29 Johnson Dec. ¶ 50. 

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D. Defendants’ Retail Commodity Transactions Are Within The CFTC’s Jurisdiction 

Under Section 2(c)(2)(D) of the Commodity Exchange Act. 

Section 2(c)(2)(D) of the Commodity Exchange Act gave the CFTC new authority over 

Defendants’ retail commodity transactions. Congress added this authority to the Act to address 

confusion over potential regulatory gaps covering off-exchange commodity transactions that 

have for years been a fertile ground for fraud. Effective July 16, 2011, financed commodity 

transactions with retail customers were prohibited unless conducted on a regulated exchange. In 

addition, Congress gave the CFTC broad authority to pursue the fraud rampant in this type of 

investment offering. The off-exchange margined, leveraged or financed trading in metals offered 

by Defendants to retail customers in this case is exactly the type of trading that is now illegal, 

and the CFTC has new authority to pursue fraud in connection with retail commodity 

transactions. 

Section 2(c)(2)(D) broadly applies to any agreement, contract, or transaction in any 

commodity that is entered into with, or offered to, a non-eligible contract participant (ECP) or 

non-eligible commercial entity as defined by the Act (i.e., retail customers) on a leveraged or 

margined basis, or financed by the offeror, the counterparty, or a person acting in concert with 

the offeror or counterparty on a similar basis. Section 2(c)(2)(D) further provides that such an 

agreement, contract, or transaction shall be subject to sections 4(a), 4(b), and 4b of the Act “as if 

the agreement, contract, or transaction was a contract of sale of a commodity for future 

delivery.” 

The Dealer Defendants offered and entered into transactions in commodities with persons 

who do not come close to meeting the definitions of an ECP. These customers have far less 

“invested on a discretionary basis” than the $10 million threshold set out in Section 1a of the 

Act, and they are not managing the risk associated with any asset or liability in entering into 

these transactions. These individuals are often elderly, and are seeking a safe, secure 

investment.30 

The transactions are also offered and entered into on a leveraged or margined basis. Each 

of the Dealer Defendants’ websites advertises (or has since July 2011) “financing” or “loans” in 

 

30 See, e.g., Declarations of Customers McElroy, Toll, Vradenburg, Bauman, Lezak, Wimberly, 

Costa, Guichard, Mercaldo, Wilson, Brantley, Andrew Burk, Lee Ann Burk, and Dulac. 

Case 9:12-cv-81311-DMM Document 4 Entered on FLSD Docket 12/06/2012 Page 9 of 25
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connection with the purchase or sale of metals.31 For example CD Hopkins offered customers 

“high investment financing.”32 Blackstone described its transactions as its “financed metals 

program.”33 Newbridge told customers “If you wish to finance your purchase, you can receive a 

loan for up to 80 percent of the value of your precious metals.”34 USCT offers a “Collateralized 

Financing Program” and claims that USCT “the potential return on [customer] investments can 

be amplified using collateralized financing.”35 The vast majority of Defendants’ transactions 

with retail customers were “financed” transactions rather than fully-paid, outright purchases of 

metals.36 

E. The Actual Delivery Exception 

Congress provided limited exceptions to the broad grant of jurisdiction to the CFTC over 

retail commodity transactions in Section 2(c)(2)(D). In an effort to distinguish situations in 

which an individual might receive financing to purchase a physical commodity for use (for 

example, electricity, propane or natural gas supply agreements with residential customers) from 

the paper-based speculative trading transactions that Hunter Wise or similar firms offer, 

Congress excepted a contract of sale that “results in actual delivery within 28 days”. 7 U.S.C. 

§ 2(c)(2)(D)(ii)(III)(aa). Thus, a transaction in which the retail customer receives the commodity 

within 28 days is not subject to being traded on a regulated commodity exchange. 

On December 14, 2011, to provide guidance on how this exception applies in practice, 

the CFTC issued a statement explaining the meaning of “actual delivery” in Section 2(c)(2)(D) 

of the Act.37 The CFTC laid out various factors it would consider in determining whether actual 

delivery has occurred, including: 

 

31 Christianson Dec. Exs. A-D. 

32 Id., Ex. A, Appx. p. 1129. 

33 Id., Ex. B, Appx. p. 1165. 

34 Id., Ex. C, Appx. p.1297. 

35 Id., Ex. D, Appx. p. 1262. 

36 Johnson Dec. Ex. WW. 

37 Defendants are well aware of this CFTC interpretation. In fact, despite being told of this 

impending enforcement action, Hunter Wise recently filed a declaratory judgment action against 

the CFTC relating to this interpretation. See Hunter Wise v. CFTC, No. 12-cv-7656 (N.D.IL 

filed Sept. 25, 2012). The CFTC is moving to dismiss the case filed by Hunter Wise in Illinois 

for various reasons including that it is a transparent attempt to impact this enforcement action. 

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ownership, possession, title, and physical location of the commodity purchased or 

sold, both before and after execution of the agreement, contract, or transaction; 

the nature of the relationship between the buyer, seller, and possessor of the 

commodity purchased or sold; and the manner in which the purchase or sale is 

recorded and completed. 

Retail Commodity Transactions Under Commodity Exchange Act, 76 Fed. Reg. 77,670-72 

(Dec. 14, 2011). 

The advisory also included examples of what does or does not constitute actual delivery. 

One clear example of actual delivery is when a “seller has physically delivered the entire 

quantity of the commodity purchased by the buyer, including any portion of the purchase made 

using leverage, margin or financing, into the possession of the buyer and has transferred title to 

that quantity of the commodity to the buyer.” Id. at 7762. On the other hand, the advisory 

makes clear that transactions such as those offered and executed by Defendants do not involve 

actual delivery: 

Actual delivery will not have occurred if, within 28 days, a book entry is made by 

the seller purporting to show that delivery of the commodity has been made to the 

buyer and/or that a sale of a commodity has subsequently been covered or hedged 

by the seller through a third party contract or account, but the seller as not, in 

accordance with the methods described in Example 1 or 2, physically delivered 

the entire quantity of the commodity purchased by the buyer, including any 

portion of the purchase made using leverage, margin or financing, and transferred 

title to that quantity of the commodity to the buyer, regardless of whether the 

agreement, contract or transaction between the buyer and the seller purports to 

create an enforceable obligation on the part of the seller, or a parent company, 

partner, agent, or other affiliate of the seller, to deliver the commodity to the 

buyer. 

Id. 

F. Defendants Do Not Actually Deliver Any Metals In Connection With Their Retail 

Commodity Transactions. 

In this case, actual delivery does not take place because there are no physical metals 

purchased or stored by Defendants in connection with their retail commodity transactions. 

Hunter Wise likely will claim that its “inventory” consists of its trading positions in its margin 

trading accounts with A-Mark, Standard Bank and Natixis. But the fact of the matter is that none 

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of these firms ever store for or deliver to Hunter Wise any physical metals.38 Looking at 

Defendants’ transactions in view of the factors identified in the CFTC’s December 2011 

advisory, whether before or after the transactions, neither Defendants nor retail customers own 

any metal, no one possesses any metal, no title to metal is passed, and there is no identifiable 

physical location of any purported metal. The relationship between the buyer and seller of the 

metal is that of a casino to a gambler, both betting on the price of a commodity. The purchase or 

sale is recorded and completed solely on paper. Once Hunter Wise executes the transaction by 

recording the retail customers’ trades into its database, the transaction is complete. Therefore, 

there is no “actual delivery” consistent with the CFTC’s interpretive statement. 

Defendants may claim that they “transfer” metals to customers when they issue 

documents they describe as “Transfer of Commodity” notices. Defendants may even argue that 

these documents transfer title to metals. But these documents are part and parcel of the fraud, 

and serve only to deceive customers into believing that they have actually purchased a tangible, 

physical asset. 

Hunter Wise provides off-exchange speculative metals transactions to retail customers. 

Hunter Wise makes money by charging retail customers a significant price spread on each trade, 

“interest” on the loans it supposedly makes, and a “service” fee that accrues on the total market 

value of the account. Hunter Wise compensates the retail dealers by allowing them to take a 

portion of the price spread, interest and service fee charges, as well as allowing the dealers to 

charge a commission on customer trades. Separately, Hunter Wise manages its exposure to 

customer trading positions by maintaining trading positions in its own margin trading accounts. 

None of this activity involves the actual delivery of commodities. 

III. THE CFTC IS ENTITLED TO A PRELIMINARY INJUNCTION 

The CFTC seeks an Order of Preliminary Injunction. Section 6c(b) of the Commodity 

Exchange Act, 7 U.S.C. § 13a-1, specifically authorizes the CFTC to seek injunctive relief in 

federal district court whenever it appears that a person has engaged, is engaging, or is about to 

engage in any act or practice constituting a violation of the Act or CFTC regulations.39 The 

 

38 Gjerdrum (A-Mark) Dec. ¶¶ 8, 13, 14; Maartens (Standard Bank) Dec. ¶¶ 13 – 15; Johnson 

Dec. ¶¶ 49-50. 

39 Section 6c(b) also provides that upon a proper showing, a temporary or permanent injunction 

shall be granted without bond. 

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CFTC “need not prove irreparable injury or the inadequacy of other remedies as required in 

private injunctive suits. A prima facie case of illegality is sufficient.” CFTC v. Muller, 570 F.2d 

1296, 1300 (5th Cir. 1978). Factors to be considered by the court in assessing the propriety of an 

injunction include: “the egregiousness of the defendant's actions, the isolated or recurrent nature 

of the infraction, the degree of scienter involved, the sincerity of the defendant's assurances 

against future violations, the defendant's recognition of the wrongful nature of his conduct, and 

the likelihood that the defendant's occupation will present opportunities for future violations.” 

S.E.C. v. Ginsburg, 362 F.3d 1292, 1304 (11th Cir. 2004); CFTC v. Hunt, 591 F.2d 1211, 1219 

(7th Cir. 1979) (“When the violation has been founded on systematic wrongdoing, rather than an 

isolated occurrence, a court should be more willing to enjoin future misconduct.”) The 

“unqualified grant of statutory authority to issue an injunction under § 13a-1 [of the Act] carries 

with it the full range of equitable remedies.” CFTC v. Wilshire Inv. Mgmt. Corp., 531 F.3d 

1339, 1344 (11th Cir. 2008). 

Further, while there is substantial evidence of fraud in this case, the illegality of the 

transactions alone is sufficient to warrant a preliminary injunction. CFTC v. American Board of 

Trade, Inc., 803 F.2d 1242, 1251 (2d Cir. 1986) (“While fraudulent transactions are indeed 

unlawful, the Act and the regulations prohibited the options transactions at issue without regard 

to questions of fraud. Defendants’ manifest intent to continue their options business unless 

enjoined fully justified the entry of a permanent injunction against them.”); CFTC v. British 

American Commodity Options, 560 F.2d 135, 142 (C.A. N.Y. 1977) (“The district court erred in 

concluding that the ‘mere’ continuation of the proscribed activities is not the necessary repetition 

of a wrong to warrant the injunction unless there is, in addition, proof of fraud or misconduct.”) 

In this case, the facts establish a prima facie case of illegality, including that Defendants 

offered and executed illegal retail commodity transactions, and defrauded customers on a 

systematic basis in violation of the Act and CFTC regulations. In addition, Defendants’ 

violations of the Act and CFTC regulations are ongoing and will continue unless the Court enters 

a preliminary injunction. With the exception of CD Hopkins,40 Defendants have shown no 

indication that they intend to cease offering and executing retail commodity transactions despite 

being well aware of the investigation of their conduct for as long as a year. 

 

40 CD Hopkins ceased operations and transferred the vast majority of its customer accounts to 

Defendant Blackstone as of May 2012. See Johnson Dec. ¶ 28 and Ex. V. 

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IV. DEFENDANTS HAVE VIOLATED AND CONTINUE TO VIOLATE THE 

COMMODITY EXCHANGE ACT 

A. Each of the Defendants Violated Section 4(a) of the Commodity Exchange Act 

Effective July 16, 2011, all of Defendants’ retail commodity transactions became subject 

to Section 4(a) of the Act. Section 4(a) provides that unless a transaction is conducted on a 

regulated exchange, it is unlawful for any person to offer to enter into, enter into, execute, 

confirm the execution of, or conduct any office or business anywhere in the United States for the 

purpose of soliciting, or accepting any order for, or otherwise dealing in retail commodity 

transactions. The CFTC does not have to establish scienter to prove a violation of Section 4(a) 

of the Act – Defendants’ conduct either violates this section or it does not. CFTC v. Noble 

Metals, 67 F.3d 766, 773-775 (9th Cir. 1995). Each of the Defendants has engaged in conduct 

that violates Section 4(a). 

The Dealer Defendants violated Section 4(a) as their websites and promotional materials 

clearly offer retail commodity transactions41 and they entered into account agreements with 

customers that expressly provide that retail customers enter into financed commodity 

transactions.42 The Dealer Defendants confirmed the execution of retail commodity transactions 

by sending customers trade confirmations and “Transfer of Commodity” notices.43 Lloyds 

violated Section 4(a) by facilitating the flow of orders and funds for retail commodity 

transactions, performing data entry to facilitate the execution of the transactions, and recruiting 

telemarketing firms like the Dealer Defendants to solicit retail customers to execute retail 

commodity transactions through Hunter Wise.44 Hunter Wise violated Section 4(a) by accepting 

orders for, executing, and confirming the execution of retail commodity transactions. Hunter 

Wise accepts the orders by phone from Lloyds, executes the orders when it makes a book entry 

in a database reflecting the retail customer’s transaction, and confirms the execution of the orders 

 

41 See, e.g., Christianson Dec. Exs. A-D. Blackstone’s website offers a “financed metals 

program.” Newbridge’s website offered a “Financing Program” to purchase metals. CD 

Hopkins promotional materials pitch its “high financing strategy” for the purchase of metals. 

USCT similarly offered “financed” metals trading. 

42 Johnson Dec. ¶¶ 73, 77 and Exs. BBB, EEE; Mercaldo Dec. Ex. C; Wimberly Dec. Ex. C; 

McElroy Dec. Ex. A. 

43 See, e.g., Johnson Dec.¶ 58 and Ex. RR; Guichard Dec. ¶ 8 and Exs. B and C. 

44 Johnson Dec. ¶ 37 and Ex. DD. 

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when it generates and sends trade confirmation and Transfer of Commodity documents.45 

Hunter Wise actually executes the retail customer’s transaction because the order is not filled or 

complete until Hunter Wise has entered the transactional information into its database and 

associated the transaction with the retail customer.46 In addition, all defendants conduct offices 

and business in the United States for purposes of engaging in these activities. 

B. Defendants’ Fraud Violates Sections 4b and 6(c)(1) of the Commodity Exchange 

Act, and CFTC Regulation 180.1. 

Sections 4b and 6(c)(1) of the Act, and CFTC Regulation 180.1, are broad anti-fraud 

provisions. Defendants47 violated these provisions by misrepresenting and failing to disclose 

material facts in connection with their retail commodity transactions. To establish liability under 

Section 4b(a) of the Act, the CFTC must show: (1) that a misrepresentation, misleading 

statement, or omission was made; (2) with scienter; and (3) that the misrepresentation, statement 

or omission was material. CFTC v. R.J. Fitzgerald & Co., Inc., 310 F.3d 1321, 1328 (11th Cir. 

2002), cert. denied, 125 S.Ct. 808 (2004) (citations omitted). 

The CFTC must make the same showing for a claim under Section 6(c)(1) of the Act and 

Regulation 180.1. Section 6(c)(1) of the Act (as amended by the Dodd-Frank Act and to be 

codified at 7 U.S.C. §§ 9, 15), provides that it is unlawful for any person “to employ . . . in 

connection with any contract of sale of any commodity in interstate commerce . . . any 

manipulative or deceptive device or contrivance, in contravention of [CFTC rules and 

regulations].” Regulation 180.1(a) implements this prohibition. It follows the structure of SEC 

Rule 10b-5 and, in relevant part, makes it unlawful for any person: 

in connection with any . . . contract of sale of any commodity in interstate 

commerce . . . to intentionally or recklessly: (1) Use or employ, or attempt to use 

or employ, any manipulative device, scheme, or artifice to defraud; (2) Make, or 

attempt to make, any untrue or misleading statement of a material fact or to omit 

to state a material fact necessary in order to make the statements made not untrue 

 

45 Morales Trans. pp. 59-69; Shoemaker Trans. pp. 47-54; see also Johnson Dec. Ex. PP, Appx. 

p. 570. 

46 Shoemaker Trans. pp. 47-54; Johnson Dec Ex. PP, Appx. pp. 575-77. 

47 Due to its role as an intermediary and its limited direct contact with retail customers, Lloyds is 

not charged in the Complaint with fraud under Sections 4b or 6(c)1 of the Act, or Regulation 

180.1. Lloyds is charged with violating Section 4(a) of the Act and with liability for aiding and 

abetting the violations of Section 4(a) by the other Defendants. 

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or misleading; (3) Engage, or attempt to engage, in any act, practice, or course of 

business, which operates or would operate as a fraud or deceit upon any person. 

See Prohibition on the Employment, or Attempted Employment, of Manipulative and Deceptive 

Devices and Prohibition on Price Manipulation, 76 Fed. Reg. 41398, 41401 (July 14, 2011). 

1. Defendants Made Misrepresentations And Omissions 

Hunter Wise and the Dealer Defendants misrepresented the nature of the product they 

sold by telling customers that they (1) sell and transfer ownership of physical metals to 

customers; (2) make loans to customers to purchase the physical metals; and (3) store customers’ 

physical metals in independent depositories. The Dealer Defendants made these representations 

on their websites and in written marketing materials sent to existing and prospective customers. 

Hunter Wise makes these same misrepresentations to retail customers when it generates all 

customer account statements, trade confirmations, and the Transfer of Commodity notices. 

Although Hunter Wise places the logos of its dealers on these documents, they are all generated 

by Hunter Wise and in many cases sent directly by Hunter Wise to retail customers. These 

documents explicitly state that customers are buying and selling physical metals,48 that 

customers own and have title to these metals,49 metals are stored at independent depositories,50

and that customers received loans for the purchase of these metals.51 Hunter Wise also provides 

customers with web-based access to its “portal” system where they are told that they own 

physical metals, that they have an outstanding loan on which they are paying interest, and that 

they are paying a service fee that includes the cost of storing the physical metals they 

purchased.52 

Despite rosy predictions of likely profit and assurances of safety,53 Defendants also failed 

to disclose the significant losses being suffered by customers engaging in retail commodity 

 

48 Johnson ¶ 58 and Ex. QQ. 

49 Bauman Ex. D. 

50 Johnson Exs. QQ, RR, SS. 

51 Id. 

52 Johnson Ex. PP, Appx. 559. 

53 See, e.g., Toll Dec. ¶ 2 (“Weiner told me that silver would be rising in price to at least $50 per 

ounce from its price at the time of $30 per ounce.”); Vradenburg Dec. ¶ 2 (“[Henry] told me that 

if I invested in metals through USCT that I could earn at least 10-15& a year on my investment. 

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transactions.54 Defendants had access on a daily basis to reports that detailed customer 

performance.55 These reports reflect that all or nearly all of their customers suffer substantial 

losses. Based on profit-loss reports generated by Hunter Wise, between July 2011 and March 31, 

2012: 

 Over 98% of customers who engaged in retail commodity transactions with CD 

Hopkins lost money, and the net loss suffered by CD Hopkins customers was 

$2,406,731. 

 Over 77 % of Blackstone customers lost money, and the net loss suffered by 

Blackstone customers was $605,839. 

 Over 94% of Newbridge customers lost money, and the net loss suffered by 

Newbridge customers was $452,925. 

 100% of USCT customers lost money, and the net loss suffered by USCT 

customers was $460,411.56

Despite this clear negative track record, neither Hunter Wise nor any Dealer Defendant disclosed 

this information to customers or prospective customers. 

2. Defendants Acted With Scienter 

Hunter Wise and the Dealer Defendants were either severely reckless, or acted 

intentionally, when telling customers that Defendants purchased and sold physical metals, made 

loans to do so, and when they failed to disclose customer losses.57 Scienter is defined as “a 

 

Henry made it sound like all his clients made money from their investments in metals with 

USCT.”); Guichard Dec. ¶ 7 (“At one point, Muller told me ‘we’re predicting silver will go up 

to $70 or $80 an ounce.’ He told me that he expected the market was ‘going to skyrocket.’”); 

Bauman Dec. ¶ 7 (“Cheek said he was sure prices were going up. Cheek also told me that 

Newbridge’s customers were making good returns.”) 

54 Costa Dec.¶¶ 4, 5; Guichard Dec. ¶¶ 7, 9; Mercaldo Dec. ¶ 9; Wilson Dec. ¶¶ 5, 7; Brantley 

Dec. ¶ 9; Andrew Burk Dec. ¶ 4; Bauman Dec. ¶¶ 4, 8, 9, 10, 12; Lezak Dec. ¶¶ 4, 5, 8, 9; 

Wimberly Dec. ¶¶ 4, 5, 10, 11; McElroy Dec. ¶¶ 2, 3, 8, 21; Toll Dec. ¶¶ 2, 3, 7, 10; Vradenburg 

Dec. ¶¶ 2, 3. 

55 Johnson Dec. ¶ 57 and Ex. PP, Appx. 562-63. 

56 Johnson Dec. ¶¶ 75, 79, 84, 89 and Exs. CCC, FFF, JJJ, NNN. 

57 The acts and omissions of the employees and agents acting for Defendants occurred within the 

scope of their employment or agency with these entities, and are deemed to be the acts and 

omissions of these entity defendants under Section 2(a)(1)(B) of the Act, 7 U.S.C. § 2 (2011) and 

CFTC Regulation 1.2, 17 C.F.R. § 1.2 (2012). 

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mental state embracing intent to deceive, manipulate, or defraud.” SEC v. Adler, 137 F.3d 1325, 

1340 (11th Cir. 1998), citing Aaron v. SEC, 446 U.S. 680, 686 n.5 (1980). In the Eleventh 

Circuit, recklessness, meaning an extreme deviation from the standards of ordinary care, also 

suffices to establish scienter. R.J. Fitzgerald & Co., 310 F.3d at 1330; see also Woods v. Barnett 

Bank of Ft. Lauderdale, 765 F.2d 1004, 1010 (11th Cir. 1985) (“The rule in this circuit is that 

‘severe recklessness’ satisfies the scienter requirement.”); White v. Sanders, 689 F.2d 1366, 1367 

n.4 (11th Cir. 1982). 

Hunter Wise acted with scienter because it is fully in control of the representations it 

makes to customers in Transfer of Commodity forms, account statements and trade 

confirmations, and also fully aware of the true nature of its margin trading accounts. Martin and 

Jager, the two principal owners of Hunter Wise, signed account agreements for Hunter Wise’s 

margin trading accounts. They know that Hunter Wise only maintains trading positions in 

metals as opposed to an inventory of physical metals. 

The Dealer Defendants acted with scienter by making blatant misrepresentations to 

customers that they made loans to customers to purchase physical metals, and by failing to 

disclose massive customer losses while at the same time advertising fantastic profit potential. 

For example, the CD Hopkins website claimed that customers “will receive the title to your 

precious metals delivered to the depository, giving you ownership . . . The metal held for you is 

not an asset of C.D. Hopkins Metals Division, the bank or depository, and as such, the security of 

your metal does not depend on their individual or collective financial condition.”58 CD Hopkins 

also told customers they received loans from Hard Asset Lending,59 even though this company 

never loaned anyone any funds. Hard Asset Lending existed only to collect in a bank account for 

Chad Hopkins the portion of price spread, service fee and interest charges assessed to CD 

Hopkins customers. Similarly, Blackstone told customers that their physical metals would be 

delivered to a depository within 72 hours.60 Newbridge claimed that customers’ financed or 

stored metal is delivered to an independent bank or depository vault at which time the customer 

 

58 Christianson Dec. Ex. A., Appx. p. 1130. 

59 Christianson Dec. Ex. A., Appx. p. 1137. 

60 Christianson Dec. Ex. B., Appx. p. 1175. The Blackstone website stated: “Am I buying a [sic] 

real gold or a certificate? When you purchase your gold with Blackstone Metals, you will 

receive a commodity transfer notice and a receipt. We will deliver the gold to your depository 

within 72 hours after the purchase is made.” 

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owns and receives title to the metals.61 And USCT told customers they would “Receive the legal 

title to your metal, giving you actual ownership.”62 These explicit misrepresentations concern 

clearly discernible facts, yet the Dealer Defendants did not undertake any reasonable efforts to 

ensure their accuracy. 

3. Defendants’ Misrepresentations Were Material 

A statement or omitted fact is material if there is a substantial likelihood that a reasonable 

investor would consider the information important in making a decision to invest. R&W 

Technical Serv. Ltd. v. CFTC, 205 F.3d 165 (5th Cir. 2000); see also R.J. Fitzgerald & Co., 310 

F.3d at 1328-29. The most fundamental misrepresentations at issue in this case relate to the 

nature of the product being sold. Customers are told that they are purchasing physical metals 

from metals dealers. In fact, retail customers are entering into off-exchange, speculative bets, 

unassociated with any actual physical metals. Retail customer accounts are managed and backed 

by an undisclosed third party that has no inventory of physical metals. These misrepresentations 

and omissions are all material as any reasonable investor would want to know this information. 

See, e.g., Saxe v. E.F. Hutton & Co., Inc., 789 F.2d 105, 110 (2d Cir. 1986) (“‘[m]aterial 

misrepresentations about the nature of the organization handling [an] account, the people [dealt] 

with, and the type of trading [the] funds were used for’ would be sufficient to state a cause of 

action pursuant to the [Act].”) (quoting Psimenos v. E.F. Hutton & Co. Inc., 722 F.2d 1041, 

1043-44, n.5 (2d Cir. 1983)). 

Defendants’ failure to disclose to customers the massive losses of existing and past 

customers is also material. Past success and experience are material factors which a reasonable 

investor would consider when deciding to invest through that firm or broker. CFTC v. 

Commonwealth Fin. Group, Inc., 874 F. Supp. 1345, 1353-54 (S.D. Fla.1994) (“Plaintiffs 

suggest that it amounts to a misrepresentation when salespeople emphasize the profits enjoyed 

by Commonwealth customers without mentioning any of the losses. The Court agrees.”); CFTC 

v. Risk Capital Trading Group, Inc., 452 F. Supp. 2d 1229, 1245-46 (N.D. Ga. 2006) 

(nondisclosure of track record showing that the vast majority of customers had lost their 

investments was a material omission of fact); CFTC v. White Pine Trust Corp., No. 04CV2093 

 

61 Christianson Dec. Ex. D, Appx. p. 1297. 

62 Christianson Dec. Ex. C, Appx. p. 1268. 

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J(NLS), 2007 WL 1121249, at *9 (S.D. Cal. Apr. 11, 2007) (“Misrepresentations regarding the 

experience or profitability of a firm or account manager are material because historical success 

and experience would be considered extremely important factors to a reasonable investor when 

deciding to invest”). 

C. The Court Should Issue A Preliminary Injunction Against the Individual 

Defendants 

The individual defendants directly violated Section 4(a) of the Act by conducting an 

office or business in the United States for the purpose of engaging in activity in connection with 

illegal off-exchange retail commodity transactions. In addition, these individual defendants are 

liable for the violations of the Act and regulations of the entities that they controlled pursuant to 

Section 13(b) of the Act, 7 U.S.C. § 13c(b). “A controlling person is liable under 13c(b) if he 

had “‘actual or constructive knowledge of the core activities that constitute the violations at issue 

and allowed them to continue.’” Commodity Futures Trading Comm'n v. Commonwealth Fin. 

Group, 874 F.Supp. 1345, 1357 (S.D.Fla.1994) (quoting In re Matter of Spiegel, [1987–1990 

Transfer Binder] Comm. Fut. L. Rep (CCH) ¶ 24,103 at 34,767 (CFTC Jan. 12, 1988)); see also 

CFTC v. Sterling Trading Group, Inc., 605 F.Supp. 2d 1245, 1258 (S.D. Fla. 2009) (the ability to 

control the activities of a company with respect to the decision to engage in particular business 

activities supports a finding of control person liability). A “fundamental purpose” of the statute 

is “to reach behind the corporate entity to the controlling individuals of the corporation and to 

impose liability for violations of the Act directly on such individuals as well as on the 

corporation itself.” R.J. Fitzgerald, 310 F.3d at 1334, quoting JCC, Inc. v. CFTC, 63 F.3d 1557, 

1567 (11th Cir. 1995). 

1. Each Individual Defendant Controlled at Least One Corporate Defendant 

Each of the individual defendants controlled the operations of their respective entities. 

Jager as the Chief Executive Officer of Hunter Wise and Martin as the President and Chief 

Operating Officer of Hunter Wise controlled the operations of Hunter Wise, including executing 

contracts on behalf of Hunter Wise, controlling its bank accounts, and making hiring and firing 

decisions.63 James Burbage and Frank Gaudino own Lloyds, and direct and control its 

operations. Gaudino and Burbage sign contracts on behalf of Lloyds, are authorized signatories 

 

63 Johnson Dec. ¶¶ 5-11 and Ex. A-H. 

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on its bank accounts, and make hiring and firing decisions for the company.64 Chad Hopkins 

was the sole member of CD Hopkins and its affiliate Hard Asset Lending. Chad Hopkins was 

the authorized signatory on the CD Hopkins bank accounts, and he made hiring and firing 

decisions for the company.65 Baris Keser is the sole managing member of Blackstone. Keser is 

the authorized signatory on the bank accounts of Blackstone. Keser is responsible for paying 

Blackstone’s employees and contractors, and he makes hiring and firing decisions for 

Blackstone.66 King is the CEO of Newbridge. King had sole control over Newbridge’s bank 

accounts.67 King made hiring and firing decisions for Newbridge. Moore is the managing 

member and sole owner of USCT. Moore controlled the bank accounts of USCT. Moore made 

hiring and firing decisions for USCT.68 

2. Each Individual Defendant Knowingly Induced the Unlawful Conduct 

Beyond owning and controlling the entity defendants, the individual defendants did not 

act in good faith or knowingly induced the violations of the firms they ran. A controlling person 

does not act in good faith if he fails to maintain a “reasonably adequate system of internal 

supervision and control” or fails to enforce that system “with any reasonable diligence.” 

Monieson v. CFTC, 996 F.2d 852, 860 (7th Cir. 1993), quoting Harrison v. Dean Witter 

Reynolds, Inc., 974 F.2d 873, 881 (7th Cir. 1992). 

Each of the principals of each corporate Defendant was directly involved in the illegal 

transactions, and the fraudulent actions identified in this filing. Martin and Jager both know the 

true nature of Hunter Wise trading accounts, yet they market Hunter Wise to dealers as a supplier 

of physical metals,69 and issue account documents to retail customers falsely stating that the 

customers own metals. Burbage and Gaudino know the nature of Lloyd’s operation as an 

intermediary between dealers and Hunter Wise, but also market themselves as suppliers of 

 

64 Johnson Dec. ¶¶ 18-20 and Exs. N-P. 

65 Johnson Dec. ¶¶ 24-27 and Exs. T, U. 

66 Johnson Dec. ¶ 29-30 and Exs. W, X. 

67 King Trans., p. 20, Appx. p. 1346. 

68 Moore Trans. pp. 33-36, Appx. p. 1363. 

69 Johnson Dec. ¶ 36, Ex. CC. 

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physical metals.70 Chad Hopkins had control over the content of the CD Hopkins website.71 On 

a daily basis, he personally performed market research, reviewed customer account activity, 

discussed customer performance with CD Hopkins staff, and monitored his staff’s phone 

communications with customers.72 Keser either personally approved or authored the content of 

Blackstone’s website, and he approved all of Blackstone’s promotional materials.73 Keser also 

runs the Compliance Department for Blackstone. King administers and is responsible for the 

content of the Newbridge website. King is also responsible for compliance functions at 

Newbridge, including creating compliance policies.74 Moore runs the day to day operations of 

USCT, including general supervision of the firm’s operations and sales solicitations. He 

personally sends out information to customers. Moore is the compliance department at USCT. 

Moore created and had control over the content on USCT’s website.75 

V. CONCLUSION 

Defendants do not make “actual delivery” of metals in connection with the transactions, 

which means their conduct is subject to the CFTC’s jurisdiction over financed retail commodity 

transactions; they do not conduct the transactions on an exchange, which makes the transactions 

illegal; and they do not possess physical metals, which makes their solicitation and purported 

financing of the transactions fraudulent. In light of the strong likelihood of ongoing fraud and 

illegal transactions, and a need to protect Defendants’ customers, the CFTC respectfully requests 

that the Court enter an Order of Preliminary Injunction and against Defendants pursuant to 

Section 6c(a) of the Commodity Exchange Act, 7 U.S.C. § 13a-1(a), enjoining them from 

committing further violations of the Act and the CFTC Regulations, and freezing assets, 

requiring an accounting, appointing a Receiver, preserving and allowing CFTC inspection of 

books and records, and granting other equitable relief. 

 

70 Johnson Dec. ¶ 37 and Ex. DD. 

71 Hopkins Trans, pp 113 – 114, Appx. pp. 1337-38. 

72 Id., pp 90-91, Appx. pp. 1335-36. 

73 Keser Testimony pp. 168-70, Appx. pp. 1358-70, 

74 King Testimony pp. 13-15, Appx. pp. 1343-45. 

75 Moore Testimony pp. 57-60, Appx. pp. 1367. 

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Date: December 6, 2012 Respectfully submitted, 

 Attorneys for Plaintiff 

Commodity Futures Trading Commission 

/s/_Carlin Metzger___________ 

Carlin Metzger (cmetzger@cftc.gov) 

Special Bar ID # A5501599 

Joseph Konizeski (jkonizeski@cftc.gov) 

Special Bar ID # A5501602 

 Brigitte Weyls (bweyls@cftc.gov) 

 Bar ID # A5501826 

 Thaddeus Glotfelty (tglotfelty@cftc.gov) 

 Bar ID # A5501827 

Rosemary Hollinger (rhollinger@cftc.gov) 

Associate Director 

Special Bar ID # A5500849 

525 West Monroe Street, Suite 1100 

Chicago, IL 60661 

Telephone: (312) 596-0700 

Fax: (312) 596-0714 

 Peter Riggs (priggs@cftc.gov) 

 Bar ID # A5501828 

 Jeff Le Riche (jleriche@cftc.gov) 

 Bar ID # A5501829 

 4900 Main Street, Suite 500 

Kansas City, Missouri 64112 

Telephone (816) 960-7700 

Fax: (816) 960-7754 

 

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CERTIFICATE OF SERVICE 

I certify that a copy of the foregoing Motion for an Order of Preliminary Injunction and 

Memorandum in Support Thereof is being sent to process servers to be served on the Defendants 

at the following addresses, along with the Plaintiff’s Complaint: 

Hunter Wise Commodities, LLC 

c/o Registered Agent Ed Martin 

4966 South Rainbow Blvd., Suite 110 

Las Vegas, NV 89118 

Hunter Wise Services, LLC 

c/o Registered Agent Ed Martin 

2361 Campus Drive, Suite 180 

Irvine, CA 92612 

Hunter Wise Credit, LLC 

c/o Registered Agent Ed Martin 

4966 South Rainbow Blvd., Suite 110 

Las Vegas, NV 89118 

Hunter Wise Trading, LLC 

c/o Registered Agent Ed Martin 

4966 South Rainbow Blvd., Suite 110 

Las Vegas, NV 89118 

Lloyds Commodities, LLC 

c/o Registered Agent J.B. Grossman, P.A. 

200 E. Las Olas Blvd., Suite 1660 

Fort Lauderdale, FL 33301 

Lloyds Commodities Credit Company, LLC 

c/o NVRA Services, Inc. 

120 Hwy 50, Suite 3 

Dayton, NV 89403 

Lloyds Services, LLC 

c/o Registered Agent J.B. Grossman, P.A. 

200 E. Las Olas Blvd., Suite 1660 

Fort Lauderdale, FL 33301 

C.D. Hopkins Financial, LLC 

c/o Corporate Creations Network 

8275 South Eastern Avenue, #200 

Las Vegas, NV 89123 

Hard Asset Lending Group, LLC 

c/o Corporate Creations Network, Inc. 

11380 Prosperity Farms Road, #221E 

Palm Beach Gardens, FL 33410 

Blackstone Metals Group LLC 

c/o Registered Agent Baris Keser 

801 Northpoint Pkwy, Suite 75 

West Palm Beach, FL 33407 

Newbridge Alliance, Inc. 

c/o Law Offices of Paul J. Burkhart, PL 

800 Village Square Crossing 

Palm Beach Gardens, FL 33410 

United States Capital Trust, LLC 

c/o Registered Agent David Moore 

660 Federal Hwy, #300 

Pompano Beach, FL 33062 

Harold Edward Martin, Jr. 

5952 Vizzi Court 

Las Vegas, NV 89131-2858 

Fred Jager 

53 S. Peak 

Laguna Niguel, CA 92677-2903 

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James Burbage 

1915 Washington Avenue 

Santa Monica, CA 90403-3305 

Frank Gaudino 

1312 Sonoma Court 

Palm Beach Gardens, FL 33410-1517 

Baris Keser 

4008 40th Way 

West Palm Beach, FL 33407-6828 

Chadewick Hopkins 

646 Flower Ave., Apt. 3 

Venice, CA 90291-6711 

John King 

319 Clematis Street 

West Palm Beach, FL 33401-4608 

David A. Moore 

144 Silver Lake Road 1 

Staten Island, NY 10301-2734 

/s/_Carlin Metzger___________ 

Carlin Metzger (cmetzger@cftc.gov) 

Special Bar ID # A5501599 

 525 West Monroe Street, Suite 1100 

Chicago, IL 60661 

Telephone: (312) 596-0536 

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