Case 1:17-cv-07181 Document 1 Filed 09/21/17 Page 1 of 21 

UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF NEW YORK 

COMMODITY FUTURES TRADING 

COMMISSION, 

Plaintiff, 

v. 

GELFMAN BLUEPRINT, INC., and 

NICHOLAS GELFMAN, 

Defendants. 

Case No. 17-7181 

ECF Case 

COMPLAINT FOR INJUNCTIVE 

AND OTHER EQUITABLE RELIEF 

AND FOR CIVIL MONETARY 

PENALTIES UNDER THE 

COMMODITY EXCHANGE ACT 

AND COMMISSION REGULATIONS 

JURY TRIAL DEMANDED 

I. INTRODUCTION 

1. Since at least January 2014 through at least January 2016 (the “Relevant Period”), 

the company Gelfman Blueprint, Inc. (“GBI”) and its Chief Executive Officer (“CEO”) and 

Head Trader, Nicholas Gelfman (“Gelfman”) (collectively, “Defendants”), operated a Bitcoin 

Ponzi scheme in which they fraudulently solicited participation in a pooled fund that purportedly 

employed a high-frequency, algorithmic trading strategy, executed by Defendants’ computer 

program called “Jigsaw,” to trade the virtual currency Bitcoin, a commodity in interstate 

commerce. During the Relevant Period, Defendants obtained more than approximately $600,000 

from at least eighty customers (“GBI Customers”) through these fraudulent solicitations. In fact, 

the strategy was fake, the purported performance reports were false, and—as in all Ponzi 

schemes—payouts of supposed profits to GBI Customers in actuality consisted of other 

customers’ misappropriated funds. 

2. Defendants fraudulently solicited potential GBI Customers by making false and 

misleading claims and omissions about the performance and reliability of Jigsaw. Then, once 

GBI Customers invested in the fraudulent scheme, Defendants attempted to conceal their 
 

 

 

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fraudulent solicitations and misappropriation of funds through issuing false reports to GBI 

Customers. In this regard, Defendants prepared and conveyed to potential and actual GBI 

Customers numerous solicitation materials, asset and performance reports, and other materials 

(1) misrepresenting that GBI Customers averaged a 7-9% monthly increase in their Bitcoin 

balances net of all fees through Defendants’ risk-protected strategy, when in fact they did not; (2) 

misrepresenting in individualized performance and balance reports that GBI Customers owned 

specific amounts of Bitcoin, when in fact those customers did not; and (3) misrepresenting that 

GBI’s assets and performance were audited by a certified public accountant (“CPA”), when in 

fact they were not. In reality, the strategy was fake, the supposed trading results were illusory, 

and any payouts of supposed profits to investors in fact were derived from funds fraudulently 

obtained from other investors. 

3. In an attempt to conceal the scheme, Gelfman staged a fake computer “hack” that 

supposedly caused the loss of nearly all GBI Customer funds. This was a lie. Later, again trying 

to conceal the full extent of the fraud, Gelfman claimed he had stolen only $25,000. But this too 

was a lie. In fact, Defendants misappropriated virtually all of the approximately $600,000 

solicited from GBI Customers. As a result, GBI Customers have lost most if not all of their 

invested funds due to Defendants’ fraud and misappropriation. 

4. Through this conduct, Defendants were engaged, are engaging, or are about to 

engage in fraudulent acts and practices in violation of the Commodity Exchange Act (“Act”), 

7 U.S.C. §§ 1–26 (2012), and Commission Regulations (“Regulations”), 17 C.F.R. pt. 1–190 

(2017), specifically Section 6(c)(1) of the Act, 7 U.S.C. § 9(1) (2012), and Regulation 180.1(a), 

17 C.F.R. § 180.1(a) (2017). 

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5. Accordingly, pursuant to Section 6c of the Act, as amended, 7 U.S.C. § 13a-1 

(2012), the Commission brings this action to enjoin such acts and practices and compel 

compliance with the Act. In addition, the Commission seeks civil monetary penalties and 

remedial ancillary relief, including, but not limited to, trading bans, restitution, disgorgement, 

rescission, pre- and post-judgment interest, and such other relief as the Court may deem 

necessary and appropriate. 

6. Unless restrained and enjoined by this Court, Defendants are likely to continue to 

engage in the acts and practices alleged in this Complaint and similar acts and practices, as more 

fully described below. 

II. JURISDICTION AND VENUE 

7. Jurisdiction. This Court has jurisdiction of this action pursuant to Section 6c of 

the Act, as amended, 7 U.S.C. § 13a-1, which authorizes the Commission to seek injunctive and 

other relief against any person whenever it shall appear to the Commission that such person has 

engaged, is engaging, or is about to engage in any act or practice constituting a violation of any 

provision of the Act or any rule, regulation, or order thereunder. 

8. Venue. Venue properly lies with the Court pursuant to Section 6c(e) of the Act, 

7 U.S.C. § 13a-1(e), because Defendants are found in, inhabit, or transact business in this 

District, and because acts and practices in violation of the Act occurred, are occurring, or are 

about to occur, within this District. 

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III. THE PARTIES 

9. Plaintiff Commodity Futures Trading Commission (“Commission” or 

“CFTC”) is an independent federal regulatory agency that is charged by Congress with the 

administration and enforcement of the Act and the Regulations. The Commission maintains its 

principal office at Three Lafayette Centre, 1155 21st Street, N.W. Washington, D.C. 20581. 

10. Defendant Gelfman Blueprint, Inc. is a New York corporation based in Staten 

Island, New York. GBI was incorporated on August 7, 2014. GBI’s last known address is 533 

Wilson Avenue, Staten Island, NY 10312. GBI has never been registered with the Commission. 

11. Defendant Nicholas Gelfman is a resident of Brooklyn, New York. Gelfman was 

the CEO and Head Trader of GBI. Gelfman has never been registered with the Commission. 

IV. STATUTORY BACKGROUND 

12. Bitcoin and other virtual currencies are encompassed in the definition of 

“commodity” under Section 1a(9) of the Act, 7 U.S.C. § 1a(9) (2012).1 

V. FACTS 

13. During the Relevant Period, Defendants solicited and received more than 

approximately $600,000 from at least eighty GBI Customers, who invested amounts ranging 

from a few hundred dollars to tens of thousands of dollars, for the purpose of entering into 

contracts of sale of Bitcoin, a virtual currency, through electronic web-based Bitcoin trading 

platforms based in various states and countries. 

1 For purposes of this Complaint, a virtual currency means a digital representation of value that functions 

as a medium of exchange, a unit of account, and/or a store of value, but does not have legal tender status 

in any jurisdiction. Bitcoin and other virtual currencies are distinct from “real” currencies, which are the 

coin and paper money of the United States or another country that are designated as legal tender, 

circulate, and are customarily used and accepted as a medium of exchange in the country of issuance. 

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Defendants Made False and Misleading Representations, and 

Omitted Material Facts, to Solicit GBI Customers 

14. During the Relevant Period, Defendants solicited customers in Manhattan, Staten 

Island, and elsewhere to invest in GBI’s fund. 

15. Gelfman solicited customers, and received and directed deposits, withdrawals, 

and transfers of GBI Customer funds on behalf of GBI. 

16. Defendants’ solicitations to potential GBI Customers to participate in GBI’s 

pooled fund included false and misleading representations and omissions of material facts—in 

short, lies and deceit—about the profitability and safety of investing in GBI. 

17. Defendants made these false and misleading representations and omissions of 

material facts to potential customers during the Relevant Period through the GBI website. 

18. For example, during the Relevant Period, GBI’s website touted the high 

investment performance of Defendants’ high-frequency, algorithmic trading computer program 

(or “bot”) named Jigsaw. In particular, GBI’s website claimed that GBI’s Jigsaw trading 

strategy both generated monthly profits and protected against risk (such as the volatility of 

Bitcoin prices, and the risk that the value of Bitcoin could drop) for customers invested in the 

fund, with statements such as: 

INCREASED BITCOIN BALANCE Customers average a 7-9% 

monthly increase in . [ is a symbol used for Bitcoin] 

PROTECTING AGAINST VOLATILITY Trading results are 

maximized during price drops. 

19. These statements were false and misleading representations and omissions of 

material facts. In fact, GBI Customers did not average the 7-9% monthly increase in Bitcoin, 

and in reality the purported strategy did not “maximize” trading results—i.e., achieve even 

higher than 7-9% monthly returns—during price drops. 

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20. During the Relevant Period, Defendants’ primary Bitcoin trading account for its 

supposed Jigsaw trading strategy was at an international virtual currency exchange, under the 

name of TMJigsaw (“Defendants’ Jigsaw trading account”). 

21. The account records of Defendants’ Jigsaw trading account reveal only infrequent 

and unprofitable trading. In particular, during 2015, Defendants’ Jigsaw trading account records 

reveal trading on only 17 calendar days that incurred approximately 185 Bitcoin in losses. 

22. Gelfman exclusively controlled and had access to Defendants’ Jigsaw trading 

account. 

23. During the Relevant Period, GBI’s website also touted GBI Customers’ access to 

their current balances, deposits, and withdrawals though the GBI website’s “interactive customer 

dashboard.” 

24. These statements constituted false and misleading representations and omissions 

of material facts. In fact, GBI Customers could not access their true current balances, deposits, 

and withdrawals through the website’s “interactive customer dashboard.” As described below, 

the figures reflecting large gains provided through the dashboard were false. 

25. During the Relevant Period, these pages on GBI’s website touting GBI’s high 

investment performance, strategy, and account transparency were publicly available. 

26. Defendants also made false and misleading representations and omissions of 

material facts to potential customers during the Relevant Period through GBI marketing 

materials. 

27. For example, Defendants’ marketing materials used for soliciting customers 

touted the high investment performance of Jigsaw through statements such as the following: 

	 Our fund earns customers a 7-11% monthly return on their 

bitcoins. 

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	 Our customers on average are and have been averaging 7-

9% profit a month on their Bitcoin Investments. 

	 As of August 1st, 2015 we had 85 customers, 2,367 

bitcoins under management and 717 in revenue. 

28. Using the then-prevailing exchange rate, 2,367 Bitcoin was equivalent to 

approximately $660,000, and 717 Bitcoin was equivalent to approximately $200,000. 

29. These and similar statements about Defendants’ trading performance and Bitcoin 

under management were false and misleading representations and omissions of material facts. 

30. In fact, as stated above, Defendants’ Jigsaw trading account records reveal only 

infrequent trading that resulted in trading losses. 

31. In fact, Defendants’ Bitcoin under management was far, far less. Defendants’ 

Jigsaw trading account records show a Bitcoin balance of less than 270 Bitcoin as of early July 

2015 (equivalent to approximately $73,000 using the then-prevailing exchange rate), no Bitcoin 

trading activity at all after early July 2015, and a Bitcoin balance of zero beginning in early 

August 2015. 

32. Defendants also made false and misleading representations and omissions of 

material facts to potential customers during the Relevant Period through various internet social 

media websites, such as Instagram and Facebook, with statements such as: 

We are a software development firm, currently offering customers 

access to a high frequency BTC [Bitcoin] trading program called 

“Jigsaw” (2% weekly BTC [Bitcoin] return). 

33. These and similar statements that Jigsaw offered a 2% weekly Bitcoin return were 

false and misleading representations and omissions of material facts. In reality, as stated above, 

Defendants’ Jigsaw trading account records reveal only infrequent trading and substantial 

Bitcoin losses. 

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34. During the Relevant Period, these social media solicitations touting GBI’s high 

investment performance, strategy, and account transparency were publicly available. 

35. Defendants also made false and misleading representations and omissions of 

material facts to potential customers during the Relevant Period through internet chat room posts, 

with statements such as: 

The current return is advertised at 7-9% monthly over an extended 

time period, and is based on the return you receive after we take 

our commission. 

36. These and similar statements that Defendants provided customers with a 7-9% 

monthly return, after commission, over an extended time period, were false and misleading 

representations and omissions of material facts. In reality, as stated above, Defendants’ Jigsaw 

trading account records reveal only infrequent trading and substantial Bitcoin losses. 

37. During the Relevant Period, such internet chat room solicitations touting GBI’s 

high investment performance and strategy were publicly available. 

38. Defendants also made false and misleading representations and omissions of 

material facts to potential customers during the Relevant Period in person. 

39. Typically, these false and misleading representations and omissions concerned 

GBI’s net monthly returns, the safety of investments with GBI (such as the claim that Jigsaw 

consistently generated profits regardless of whether Bitcoin prices went up or down), and GBI 

Customers’ ability to monitor their investments online through the GBI website. 

40. For example, in or around December 2014, in Manhattan, Gelfman and another 

GBI officer made such false and misleading statements about GBI’s performance, the safety of 

the investment, and GBI Customers’ ability to monitor their investments, while soliciting a 

potential customer in person. This person then became a GBI Customer, over time investing 

more than $50,000, all of which was misappropriated by Defendants. 

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41. Similarly, in or around April 2015, in Brooklyn, agents of GBI using information 

provided by Gelfman made such false and misleading statements about GBI’s performance, the 

safety of the investment, and GBI Customers’ ability to monitor their investments, while 

soliciting a potential customer in person. This person then became a GBI Customer, over time 

investing more than $60,000, all of which was misappropriated by Defendants. 

42. Similarly, in or around June 2015, in Staten Island, agents of GBI using 

information provided by Gelfman made such false and misleading statements about GBI’s 

performance, the safety of the investment, and GBI Customers’ ability to monitor their 

investments, while soliciting a potential customer in person. This person then became a GBI 

Customer, over time investing more than $40,000, all of which was misappropriated by 

Defendants. 

43. Such statements in person by Defendants to these and numerous other potential 

customers were false and misleading representations and omissions of material facts. In reality, 

as stated above, Defendants’ Jigsaw trading account records reveal only infrequent trading that 

resulted in substantial Bitcoin losses, and GBI Customers could not verify and monitor their 

investments online, such as through logging into GBI website’s customer “dashboard,” since the 

information Defendants provided therein was falsified by Defendants. 

44. Defendants made these false and misleading representations and omissions of 

material facts to potential customers as well as existing GBI Customers on the GBI website, in 

marketing materials, in internet social media and chatroom websites, and in person knowingly or 

with reckless disregard for the truth. 

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Defendants Provided False Account Statements and Made Other Misrepresentations to 

GBI Customers 

45. Defendants were fiduciaries of GBI Customers. 

46. Despite this, during the Relevant Period Defendants perpetuated their fraudulent 

scheme by providing GBI Customers false reports, by obtaining false and misleading documents 

from an accountant through deceit, and through other false and misleading representations and 

omissions of material facts. 

47. Once GBI Customers had invested in GBI, Defendants provided GBI Customers 

with password-protected access to restricted areas of Defendants’ website where GBI Customers 

could access and view account statements and reports purporting to show their account balances 

and trading profits or losses. 

48. During the Relevant Period, these statements and reports to GBI Customers were 

false and misleading because the reported trading conducted on behalf of customers did not 

occur. In reality, the account and performance statements misrepresented, and provided false 

and misleading descriptions of, trading activity and account balances. 

49. For example, on or around August 1, 2015, one GBI Customer logged into the 

GBI website and received from the GBI “dashboard” an account statement that the customer’s 

investment balance was 197.719 Bitcoin, worth $58,297.45 (purportedly using the thenprevailing exchange rate). This reported balance reflected customer profits (net of fees to GBI 

and a subsequent deposit) of more than 38%, achieved in less than two months, based on the 

customer’s initial investment of approximately $40,000. 

50. In fact, this statement and report to the GBI Customer were false and misleading. 

The reported balance did not exist, and the reported profits were illusory. During that two-month 

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period, Defendants’ Jigsaw trading account records reveal trading on only four calendar days that 

resulted in thousands of dollars in losses. 

51. During the Relevant Period, Defendants also provided account balance and 

profitability information by telephone to GBI Customers. 

52. The GBI Customer account balance and profitability information provided by 

Defendants to GBI Customers by telephone was false and misleading because the supposed 

trading conducted on behalf of investors did not occur, the balances did not exist, and the 

reported profits were illusory. In reality, as stated above, Defendants’ Jigsaw trading account 

records reveal only infrequent trading and substantial Bitcoin losses. 

53. In or around July to October 2015, Defendants obtained a series of one-page 

documents from an accountant stating GBI’s assets under management, specifically, the amount 

of GBI’s balance at a particular Bitcoin exchange as of a particular date. 

54. These documents obtained from the accountant reflected that GBI’s assets under 

management held at the specific exchange, an international platform advertised as the “world’s 

largest and most advanced cryptocurrencies exchange,” were increasing in value each month 

and, as of October 2015, were in excess of $840,000. 

55. These statements were false and misleading representations and omissions of 

material facts. 

56. In reality, Defendants’ account balance was far, far less: Defendants’ Jigsaw 

trading account records show a Bitcoin balance of less than 270 Bitcoin as of early July 2015 

(then equivalent to approximately $73,000), and a Bitcoin balance of zero beginning in early 

August 2015. 

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57. Defendants fraudulently obtained the one-page account-balance documents from 

the accountant by providing the accountant with information Defendants knew to be misleading 

and false, such as false account or balance statements that Gelfman had generated with the intent 

to deceive. 

58. Referring to this accountant and these documents, Defendants represented to 

potential and actual GBI Customers that GBI had monthly CPA audited results and asserted 

balances under management according to the last CPA audit. 

59. These statements were false and misleading representations and omissions of 

material facts. 

60. In reality, this accountant was not a CPA. 

61. In reality, this accountant never performed an audit of GBI. 

62. In reality, the account balance documents stated false balances because the 

information that Defendants provided to the accountant was false and intended to mislead. 

63. Defendants made these and other false and misleading representations and 

omissions of material facts to potential and actual GBI Customers concerning trading activity 

and results, account balances, and CPA audits knowingly or with reckless disregard for the truth. 

Defendants Misappropriated GBI Customers’ Funds 

64. Between approximately January 2014 and December 2015, Defendants received 

in excess of approximately $600,000 from more than 80 GBI Customers. 

65. During the Relevant Period, Defendants misappropriated almost all of these GBI 

Customers’ funds for improper and unauthorized uses, such as to pay GBI business expenses and 

to wrongfully enrich Gelfman. 

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66. For example, during the Relevant Period, GBI charged GBI Customers fees in the 

form of large percentages of supposed Bitcoin trading profits. 

67. Nearly all GBI Customers were charged fees of approximately 50- 65% of those 

purported trading profits. 

68. Defendants’ representations of trading results and profits for or on behalf of GBI 

Customers were false. Consequently, all “fees” deducted by Defendants from GBI Customers’ 

funds based on these false profits in fact were GBI Customer funds that Defendants 

misappropriated from GBI Customers. 

69. In or around October 2015, Gelfman told other GBI officers that a computer 

“hack” had caused GBI to lose all or nearly all of GBI Customers’ investments. Defendants then 

conveyed this story to GBI Customers to explain the loss of their investments. 

70. For instance, Defendants notified a GBI Customer, who had invested more than 

$50,000 beginning in December 2014, and whose investment in GBI’s fund had purportedly 

generated tens of thousands of dollars of profits through Jigsaw, of the supposed hack and that 

all of the GBI Customer’s investments were gone. This GBI Customer was never repaid any of 

the investment. 

71. In fact, Defendants’ statements about the supposed computer “hack” causing the 

loss of all or nearly all GBI’s Bitcoin were false. 

72. In fact, there was no “hack” in October 2015 causing massive losses. In fact, 

Defendants’ Jigsaw trading account records reveal that the account had had a Bitcoin balance of 

zero since early August 2015. 

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73. In fact, Defendants had misappropriated nearly all of the GBI Customers’ funds 

for Defendants’ own financial benefit and to transfer the funds illegally to other customers of the 

Ponzi scheme, and had invented the falsehood of the “hack” to conceal this misappropriation. 

74. To the extent any GBI Customers received any purported profits from GBI, those 

profits in fact consisted of funds that Defendants misappropriated from other GBI Customers, in 

the nature of a Ponzi scheme. 

75. In or around January 2016, Gelfman confessed to other GBI officers, such as the 

Chief Operating Officer and the Chief Compliance Officer, that he had stolen approximately 

$25,000 from GBI. 

76. In fact, Gelfman had misappropriated far in excess of $25,000 in GBI Customer 

funds. In reality, Defendants misappropriated nearly all GBI Customer funds. 

Nicholas Gelfman’s Invocation of Fifth Amendment Privilege Against Self-Incrimination 

77. On April 22, 2016, pursuant to an investigatory subpoena, Gelfman appeared 

before the Commission for testimony concerning GBI. 

78. In response to Division staff’s questions at this testimony, Gelfman invoked his 

Fifth Amendment privilege against compelled self-incrimination. 

Gelfman Was a Controlling Person of GBI 

79. Defendants’ website and marketing materials identified Gelfman as CEO and 

Head Trader of GBI. Gelfman solicited investors on behalf of GBI, created and controlled the 

performance and investment information in solicitation materials, created and controlled the 

content of GBI’s website, oversaw and controlled GBI’s trading of Bitcoin, was a signatory to 

GBI bank accounts, and generated account information on behalf of GBI. 

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Gelfman Acted as Agent for GBI
	

80. Through his actions as CEO and head trader overseeing Bitcoin trading by GBI, 

managing the purported Jigsaw bot, and calculating GBI purported performance results, and thus 

profits and fees, as well as through his additional actions of marketing GBI to potential investors, 

soliciting investors, providing information to the accountant during reviews of GBI’s assets 

under management, and providing account information to GBI Customers, Gelfman acted in the 

scope of his employment and on behalf of GBI. 

VI. VIOLATIONS OF THE COMMODITY EXCHANGE ACT AND REGULATIONS 

Count I—Fraud by Deceptive Device or Contrivance 

Violations of Section 6(c)(1) of the Act and 

Regulation 180.1(a) by Gelfman and GBI 

81. Paragraphs 1 through 80 are re-alleged and incorporated herein by reference. 

82. Section 6(c)(1) of the Act, 7 U.S.C. § 9(1) (2012), makes it unlawful for any 

person, directly or indirectly, to: 

use or employ, or attempt to use or employ, in connection with any 

swap, or a contract of sale of any commodity in interstate 

commerce, or for future delivery on or subject to the rules of any 

registered entity, any manipulative or deceptive device or 

contrivance, in contravention of such rules and regulations as the 

Commission shall promulgate by not later than 1 year after [July 

21, 2010, the date of enactment of the Dodd-Frank Wall Street 

Reform and Consumer Protection Act] . . . . 

83. Regulation 180.1(a), 17 C.F.R. § 180.1(a) (2017), provides: 

It shall be unlawful for any person, directly or indirectly, in 

connection with any swap, or contract of sale of any commodity in 

interstate commerce, or contract for future delivery on or subject to 

the rules of any registered entity, to intentionally or recklessly: 

(1) Use or employ, or attempt to use or employ, any manipulative 

device, scheme, or artifice to defraud; 

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(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 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 . . . . 

84. During the Relevant Period, as described above, Defendants violated 

Section 6(c)(1) of the Act and Regulation 180.1(a) by, among other things, in connection with 

contracts of sale of commodities in interstate commerce, making or attempting to make untrue or 

misleading statements of material fact or omitting to state or attempting to omit material facts 

necessary in order to make statements made not untrue or misleading, such as the following: 

A.		Issuing performance statements and updates misrepresenting the supposed amount 

of bitcoins and profits in GBI Customers’ purported accounts; 

B.		Issuing written statements misrepresenting the amount of GBI’s assets under 

management; 

C.		Issuing written statements misrepresenting the profitability of Defendants’ Bitcoin 

trading; 

D.		Failing to disclose, and omitting, that GBI never achieved the advertised 

performance and returns—such as a 7-9% monthly increase in bitcoins—for its 

customers; 

E.		Failing to disclose, and omitting, that GBI never was audited by a CPA; and 

F.		 Failing to disclose, and omitting, that Defendants were misappropriating GBI 

Customer funds. 

85. As described above, Defendants violated Section 6(c)(1) of the Act and 

Regulation 180.1(a) by, among other things, in connection with contracts of sale of a commodity 

in interstate commerce, soliciting investors with false and misleading performance statements; 

providing GBI Customers false account and performance statements that misrepresented GBI 

Customers’ investment performance; misrepresenting and omitting material facts on Defendants’ 

website and in other communications with investors regarding GBI’s strategy, performance, and 

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CPA audits, as well as other material facts regarding GBI and GBI Customers’ interest in the 

fund; and misappropriating GBI Customers’ funds. 

86. Defendants engaged in the acts and practices described above willfully, 

intentionally, or recklessly. 

87. By this conduct, Defendants violated Section 6(c)(1) of the Act and 

Regulation 180.1(a). 

88. The acts, omissions, and failures of Gelfman described in this Complaint occurred 

within the scope of his agency, employment, and office at GBI. Accordingly, GBI is liable under 

Section 2(a)(1)(B) of the Act, 7 U.S.C. § 2(a)(1)(B) (2012), and Regulation 1.2, 17 C.F.R. § 1.2 

(2017), as principal for its agent’s acts, omissions, or failures in violation of the Section 6(c)(1) 

of the Act and Regulation 180.1(a). 

89. At all times relevant to this Complaint, Gelfman controlled GBI, directly or 

indirectly, and did not act in good faith or knowingly induced, directly or indirectly, GBI’s 

conduct constituting the violations of GBI described in this Count. Accordingly, pursuant to 

Section 13(b) of the Act, 7 U.S.C. § 13c(b) (2012), Gelfman is liable for GBI’s violations of 

Section 6(c)(1) of the Act and Regulation 180.1(a). 

90. Each act of (1) using or employing, or attempting to use or employ, a 

manipulative device, scheme, or artifice to defraud; (2) making, or attempting to make, untrue or 

misleading statements of material fact, or omitting to state material facts necessary to make the 

statements not untrue or misleading; and (3) engaging, or attempting to engage, in a fraudulent or 

deceitful act, practice, or a course of business, including but not limited to those specifically 

alleged herein, is alleged as a separate and distinct violation of Section 6(c)(1) of the Act and 

Regulation 180.1. 

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VII. RELIEF REQUESTED 

WHEREFORE, the Commission respectfully requests that the Court, as authorized by 

Section 6c of the Act, 7 U.S.C. § 13a-1 (2012), and pursuant to its own equitable powers, enter: 

A.		An order finding that Defendants violated Section 6(c)(1) of the Act, 

7 U.S.C. § 9(1) (2012), and Regulation 180.1(a), 17 C.F.R. § 180.1(a) (2017); 

B.		An order of permanent injunction enjoining each Defendant and any other person 

or entity associated with them, including but not limited to affiliates, agents, 

servants, employees, assigns, attorneys, and all persons in active concert or 

participation with any Defendant, including any successor thereof, from: 

i.		 Engaging, directly or indirectly, in conduct in violation of Section 6(c)(1) 

of the Act, or Regulation 180.1(a); 

ii.		 Trading on or subject to the rules of any registered entity (as that term is 

defined in Section 1a(40) of the Act, 7 U.S.C. § 1a(40) (2012)); 

iii.		 Entering into any transactions involving “commodity interests” (as that 

term is defined in Regulation 1.3(yy), 17 C.F.R. § 1.3(yy) (2017)), for 

their own personal account(s) or for any account in which Defendants 

have a direct or indirect interest; 

iv.		 Having any commodity interests traded on Defendants’ behalf; 

v.		 Controlling or directing the trading for or on behalf of any other person or 

entity, whether by power of attorney or otherwise, in any account 

involving commodity interests; and/or 

vi.		 Soliciting, receiving, or accepting any funds from any person for the 

purpose of purchasing or selling any commodity interests; 

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Case 1:17-cv-07181 Document 1 Filed 09/21/17 Page 19 of 21 

C.		An order requiring Defendants to pay civil monetary penalties, plus postjudgment interest thereon, in the amount of the greater of (1) $170,472 for each 

violation of the Act and Regulations, or (2) triple the monetary gain from 

violations of the Act and Regulations; 

D.		An order directing Defendants, as well as any successors thereof, to disgorge, 

pursuant to such procedure as the Court may order, all benefits received 

including, but not limited to, trading profits, revenues, salaries, commissions, 

fees, or loans derived directly or indirectly from acts or practices which constitute 

violations of the Act and Regulations, as described herein, and pre- and postjudgment interest thereon from the date of such violations; 

E.		An order directing Defendants, as well as any successors thereof, to make full 

restitution, pursuant to such procedure as the Court may order, to every customer 

and investor whose funds any Defendant received, or caused another person or 

entity to receive, as a result of the acts and practices constituting violations of the 

Act and Regulations, as described herein, and pre- and post-judgment interest 

thereon from the date of such violations; 

F.		An order directing Defendants, as well as any successors thereof, to rescind, 

pursuant to such procedure as the Court may order, all contracts and agreements, 

whether express or implied, entered into between, with, or among Defendants and 

any customer or investor whose funds were received by Defendants as a result of 

the acts and practices which constituted violations of the Act and the Regulations, 

as described herein; 

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Case 1:17-cv-07181 Document 1 Filed 09/21/17 Page 20 of 21 

G.		An order directing that Defendants, and any successors thereof, make an 

accounting to the Court of all of their assets and liabilities, together with all funds 

they received from and paid to investors and other persons in connection with 

commodity transactions and all disbursements for any purpose whatsoever of 

funds received from commodity transactions, including salaries, commissions, 

interest, fees, loans, and other disbursement of money or property of any kind 

from at least January 2014 to the date of such accounting; 

H.		An order requiring Defendants and any successors thereof to pay costs and fees as 

permitted by 28 U.S.C. §§ 1920 and 2412(a)(2) (2012); and 

I.		 An order providing such other and further relief as the Court deems proper. 

* * * 

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Case 1:17-cv-07181 Document 1 Filed 09/21/17 Page 21 of 21 

VIII. DEMAND FOR JURY TRIAL 

Plaintiff hereby demands a jury trial. 

Dated: September 21, 2017 

COMMODITY FUTURES TRADING 

COMMISSION 

By: s/ Gates S. Hurand 

Gates S. Hurand 

Senior Trial Attorney 

ghurand@cftc.gov 

Phone: (646) 746-9700 

K. Brent Tomer 

Chief Trial Attorney 

ktomer@cftc.gov 

Phone: (646) 746-9700 

Manal M. Sultan 

Deputy Director 

msultan@cftc.gov 

Phone: (646) 746-9700 

Commodity Futures Trading Commission 

Division of Enforcement 

140 Broadway, 19th Floor 

New York, NY 10005 

Phone: (646) 746-9700 

Fax: (646) 746-9940 

ATTORNEYS FOR PLAINTIFF 

COMMODITY FUTURES TRADING 

COMMISSION 

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