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UNITED STATES DISTRICT COURT
 

FOR THE NORTHERN DISTRICT OF ILLINOIS 

EASTERN DIVISION 

COMMODITY FUTURES 

TRADING COMMISSION, 

Plaintiff, 

v. 

MONEX DEPOSIT COMPANY, MONEX 

CREDIT COMPANY, NEWPORT 

SERVICES CORPORATION, LOUIS 

CARABINI, and MICHAEL CARABINI, 

Defendants. 

Hon. ___________ 

Case No. 1:17-cv-06416 

JURY TRIAL DEMANDED 

COMPLAINT FOR INJUNCTIVE AND EQUITABLE
 

RELIEF AND PENALTIES UNDER THE COMMODITY EXCHANGE ACT 

Plaintiff Commodity Futures Trading Commission (“CFTC” or “Commission”), an 

independent agency of the United States Government, by its attorneys, alleges as follows: 

SUMMARY 

1. From July 16, 2011 through the present (the “relevant period”), Monex Deposit 

Company and its affiliates Monex Credit Company and Newport Service Corporation (referred to 

collectively as “Monex”), acting individually and collectively, through various officers, employees 

and agents, have defrauded thousands of retail customers throughout the United States out of 

hundreds of millions of dollars while executing tens of thousands of illegal, off-exchange retail 

commodity transactions. 

2. Monex offers off-exchange, leveraged precious metals trading to retail investors 

through its “Atlas” program. Monex deceptively pitches its Atlas program as a safe, secure and 

profitable way for retail customers to invest in precious metals. It is not. To the contrary, 
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approximately 12,000 leveraged Atlas accounts collectively realized more than $290 million in 

losses between July 16, 2011 and March 31, 2017—an average of more than $4 million a month. 

Approximately 90% of leveraged Atlas accounts lost money during this period. Despite touting 

the benefits of the Atlas program, Monex never discloses to prospective customers the massive 

and pervasive losses suffered by its customers. 

3. In an effort to induce customers to trade in its Atlas program, Monex 

systematically over-represents the likelihood of profit for leveraged Atlas trading, 

underrepresents the risk of loss, and falsely portrays the relationship between Monex and its 

Atlas customers as one of “trust.” Among other false or material misleading claims, Monex 

describes the Atlas program as a way to shield wealth from inflation, but fails to disclose the 

significant number of customers who have had trading positions force-liquidated at a loss; 

Monex sales representatives portray themselves as fiduciaries who look out for the best interests 

of their customers, when, in fact, they are not fiduciaries and do not always act in the customers’ 

best interests; and Monex claims that because metals “will always have value . . . [a customer] 

can’t lose [his or her] investment,” when, in fact, the customers can—and often do—suffer 

substantial losses. 

4. Although it touts the benefits and safety of its Atlas program, Monex has 

structured the Atlas program in such a way that customer losses are all but inevitable, and Monex 

stands to gain as a result of these losses. These Monex gains flowed in part from the Atlas 

program’s structure, which included outsized price spreads, commissions, interest on loans, and 

administrative fees. To take just one example, Monex price spreads for a single trade can be 100 

times larger than price spreads for a similar trade on a regulated exchange. Monex serves as the 

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counterparty for each Atlas transaction, thus benefitting directly from these large price spreads, 

at the customers’ expense. 

5. Monex and its sales representatives engage in high-pressure sales tactics designed 

to push customers into leveraged precious metals trading in the Atlas program. As part of their 

pitch, they misrepresent the likelihood of profit, systematically downplay the risks of leveraged 

Atlas trading, and falsely promise that Monex will serve as customers’ fiduciaries. These sales 

representatives are paid with commissions and bonuses tied directly to the number of Atlas 

accounts they open and the volume of transactions in these accounts, rather than customer 

account performance or rate of return, making clear that Monex prioritizes account opening and 

trading volume, not account performance. 

6. In addition to operating its Atlas program as a fraud on its customers, Monex also 

operates the program in violation of governing laws designed to regulate leveraged retail 

commodity trading. Leveraged trading on platforms like Monex’s bears key similarities to 

trading on regulated futures exchanges. Prior to 2010, however, some such platforms eluded 

regulation by utilizing contract terms that purported to distinguish their trading from that 

conducted on futures exchanges—in form, but not in substance. In recognition of the risks that 

unregulated trading platforms like the Atlas program pose to consumers, the Dodd-Frank Wall 

Street Reform and Consumer Protection Act of 2010, Pub. L. 111-203, H.R. 4173, commonly 

referred to as “the Dodd-Frank Act,” made it illegal to offer or enter into leveraged commodity 

transactions with retail customers, unless the transactions are conducted on a regulated 

derivatives exchange, among other requirements. Although Monex, through its Atlas program, 

offers and enters into leveraged commodity transactions with retail customers, it does not 

conduct those transactions on a regulated exchange. In addition, the Act requires entities to 

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register with the Commission in order to solicit and accept orders for retail commodity 

transactions, like those in the Atlas program, and to accept funds in connection with those 

transactions. Although Monex, through its Atlas program, solicits and accepts orders for retail 

commodity transactions, and accepts funds, or extends credit, in connection with those 

transactions, Monex did not register as required. 

7. By virtue of this conduct and the conduct further described herein, Monex has 

engaged, is engaging, or is about to engage in conduct in violation of Sections 4(a), 4b(a)(2)(A) 

and (C), 4d, and 6(c)(1) of the Commodity Exchange Act (“CEA”), 7 U.S.C. §§ 6(a), 

6b(a)(2)(A), (C), 6d, 9(1) (2012), and Section 180.1(a) of the regulations promulgated under the 

CEA (“Regulations”), 17 C.F.R. § 180.1(a) (2017). 

8. Louis Carabini and Michael Carabini are liable for Monex’s violations of the 

CEA and the Regulations as “control persons” of Monex because they individually and 

collectively held and exercised direct or indirect control over Monex and either failed to act in 

good faith or knowingly induced the acts constituting Monex’s violations. 

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

engaging in the acts and practices alleged in this complaint, or in similar acts and practices. 

10. The CFTC accordingly brings this action pursuant to Section 6c of the CEA, 

7 U.S.C. § 13a-1 (2012), to enjoin Defendants’ unlawful practices and to compel their 

compliance with the CEA and Regulations. In addition, the CFTC seeks restitution, rescission, 

disgorgement, civil monetary penalties, and such other equitable relief as this Court may deem 

appropriate. 

JURISDICTION AND VENUE 

11. This Court has jurisdiction over this action under 28 U.S.C. § 1331 (federal 

question jurisdiction) and 28 U.S.C. § 1345, which provides that district courts have original 

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jurisdiction over civil actions commenced by the United States or by any agency expressly 

authorized to sue by Act of Congress. Section 6c(a) of the CEA, 7 U.S.C. § 13a-1(a) (2012), 

authorizes the Commission to seek injunctive 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 the CEA or any rule, regulation, or order thereunder. 

12. Venue properly lies with the Court pursuant to Section 6c(e) of the CEA, 7 U.S.C. 

§ 13a-1(e) (2012), because Defendants transact business in this District and certain transactions, 

acts, practices, and business alleged in this Complaint occurred, are occurring, and/or are about 

to occur within this District. 

THE PARTIES 

13. The CFTC is an independent federal regulatory agency that administers and 

enforces the CEA, 7 U.S. C. §§ 1-26 (2012), and the Regulations promulgated thereunder, 17 

C.F.R. pt. 1-190 (2017). 

14. Monex Deposit Company and Monex Credit Company are California limited 

partnerships organized in 1987. Newport Service Corporation is a California corporation formed 

in 1987. All three entities are located in the same building at 4910 Birch Street, Newport Beach, 

California. These three Monex entities are commonly owned and/or controlled by Michael 

Carabini and his father Louis Carabini through various corporate entities and trusts. Michael 

Carabini resides in San Juan Capistrano, California. Louis Carabini resides in Laguna Beach, 

California. None of the defendants has been registered with the Commission in any capacity 

since 1991. 

15. According to Monex’s internal documents, “Monex Deposit Company” buys and 

sells precious metals with customers through a telephonic sales force who solicit retail customers 

to enter into Atlas transactions and also accepts funds in connection with its solicitation and 

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acceptance of orders for Atlas transactions. Monex Deposit Company acts as a counterparty to 

Atlas transactions. According to Monex, “Monex Credit Company” provides loans to customers 

in these transactions and also leases precious metals to customers. Monex Credit Company 

issues monthly account statements to customers and also accepts funds in connection with its 

extension of credit to secure Atlas transactions. Monex Credit Company also acts as the 

counterparty to some Atlas transactions. According to Monex, “Newport Service Corporation” 

performs administrative and accounting services for these and other Monex affiliates. Newport 

Service Corporation also solicits and accepts orders for Atlas transactions, advertises the Atlas 

program on television, and offers Atlas trading through other marketing devices. Newport 

Service Corporation also accepts funds in connection with its solicitation and acceptance of 

orders for Atlas transactions. From either the customer’s perspective or an operational 

perspective, these entities operate seamlessly as a common enterprise. 

16. During the relevant period, Michael Carabini was the primary operational 

overseer of Monex. Louis Carabini is the founder of Monex. Despite passing on many 

operational responsibilities to his son Michael, Louis Carabini remained substantially involved in 

all of Monex’s operations during the relevant period. Both Michael and Louis Carabini are 

signatories on Monex’s bank accounts, execute contracts on behalf of Monex and its affiliates, 

and have the authority to hire and fire Monex employees. Michael Carabini is primarily 

responsible for Monex’s advertisements and marketing, including the content of the Monex 

website located at www.monex.com. 

STATUTORY BACKGROUND 

17. Effective July 16, 2011, the Dodd-Frank Act broadened the scope of the Act to 

include financed commodity transactions with retail customers (“retail commodity 

transactions”). Section 2(c)(2)(D) of the CEA (7 U.S.C. § 2(c)(2)(D) (2012)) applies to “any 

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agreement, contract, or transaction in any commodity” that is entered into with, or offered to, a 

non-eligible contract participant “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.” These retail commodity transactions are subject to Sections 4(a) and 4b of the CEA 

(7 U.S.C. §§ 6(a), and 6b (2012)) “as if” they are a contract of sale of a commodity for future 

delivery, commonly known as a “futures contract.” As a result, these transactions must be 

executed on an exchange as required by Section 4(a), and are subject to the anti-fraud provisions 

in Section 4b. 

18. The CEA defines an Eligible Contract Participant (“ECP”), in relevant part, as an 

individual who has amounts invested on a discretionary basis, the aggregate of which is in excess 

of $10 million, or $5 million if the individual enters into the transaction “in order to manage the 

risk associated with an asset owned or liability incurred, or reasonably likely to be owned or 

incurred, by the individual.” Section 1a(18)(xi) of the CEA, 7 U.S.C. § 1a(18)(xi) (2012). 

19. Section 4(a) of the CEA, 7 U.S.C. § 6(a) (2012), in relevant part, makes it 

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, 

accepting any order for, or otherwise dealing in any transaction in, or in connection with, a 

contract for the purchase or sale of a commodity for future delivery unless the transaction is 

conducted on or subject to the rules of a board of trade that has been designated or registered by 

the Commission as a contract market. 

20. Section 4b(a)(2) of the CEA, 7 U.S.C. § 6b(a)(2) (2012), in relevant part, makes it 

unlawful: 

for any person, in or in connection with any order to make, or the making of, any contract 

of sale of any commodity for future delivery . . . that is made, or to be made, for on 

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behalf of, or with, any other person, other than on or subject to the rules of a designated 

contract market— (A) to cheat or defraud or attempt to cheat or defraud the other person; 

(B) willfully to make or cause to be made to the other person any false report or 

statement or willfully to enter or cause to be entered for the other person any false record; 

[or] (C) willfully to deceive or attempt to deceive the other person by any means 

whatsoever in regard to any order or contract or the disposition or execution of any order 

or contract, or in regard to any act of agency performed, with respect to any order or 

contact for or . . . with the other person. 

21. Effective August 15, 2011, Section 753 of the Dodd-Frank Act amended Section 

6(c) of the CEA, 7 U.S.C. § 9 (2012), and broadened the CFTC’s anti-fraud authority. Section 

6(c)(1) of the CEA, 7 U.S.C. § 9(1), in relevant part, 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 (without regard to whether it is 

leveraged, margined, or financed), or for future delivery on or subject to the rules of any 

registered entity, any manipulative or deceptive device or contrivance, in contravention of 

Regulation 180.1, 17 C.F.R. § 180.1 (2017). 

22. Effective August 15, 2011, Regulation 180.1, in relevant part, makes it unlawful 

for any person, directly or indirectly, 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 or misleading; or (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. 

23. Section 4d(1) of the CEA, 7 U.S.C. § 6d(1) (2012), provides that “[it] shall be 

unlawful for any person to be a futures commission merchant unless — such person shall have 

registered . . . with the Commission as such futures commission merchant.” Section 1a(28)(A) 

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of the CEA, 7 U.S.C. § 1a(28)(A)(2012), defines a “futures commission merchant” to include 

any individual, association, partnership, corporation, or trust that, among other things, is engaged 

in soliciting or accepting orders for any agreement, contract, or transaction described in Section 

2(c)(2)(D)(i) of the CEA, 7 U.S.C. § 2(c)(2)(D)(i) (2012), or acts as a counterparty to such 

transaction, and in or in connection with that activity accepts any money, securities, or property 

(or extends credit in lieu thereof) to margin, guarantee, or secure any trades or contracts that 

result or may result therefrom. 

THE ILLEGAL TRANSACTIONS AND FRAUDULENT SCHEME 

I. Monex’s Off-Exchange “Atlas” Commodities Trading Platform 

24. Monex, through various officers, employees and agents, acting as a common 

enterprise, offers retail customers two types of transactions: (1) the purchase or sale of physical 

metals such as coins or bars after full payment for actual delivery; and, (2) off exchange trading 

of silver, gold, platinum and palladium on a leveraged, margined or financed basis in which a 

retail customer purportedly purchases physical metal and pays only a portion of the purchase 

price in the Atlas program. 

25. Through its “Atlas” trading account, Monex offers retail customers the ability to 

open trading positions in gold, silver, platinum and palladium. Trading does not take place on a 

regulated exchange or board of trade. Instead, Monex operates its own unregulated trading 

platform, allowing customers to place futures-like trades to speculate on price movements in 

precious metals, with Monex acting as the counterparty to every transaction. 

26. From July 16, 2011 to March 31, 2017 (the review period) Monex executed 

approximately 140,000 trades for more than 12,000 customer accounts engaging in leveraged 

precious metals trading through Monex’s Atlas program. 

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27. Monex does not limit participation in the Atlas program to individuals who have 

more than a certain amount invested on a discretionary basis, and indeed the vast majority of 

Atlas customers are not ECPs. 

28. Monex permits customers to trade “on leverage” or “on margin,” meaning that 

Monex will finance a portion of its customers’ trading positions. Monex requires that Atlas 

customers deposit funds to serve as margin for open trading positions in their Atlas accounts. 

During the relevant period Monex’s initial margin requirement was generally 22-25% of the 

value of a trading account’s open positions. With an initial margin requirement of 25%, for 

example, a trader could deposit $25,000 in an Atlas account and open a position valued at 

$100,000. 

29. As in futures trading, Atlas account traders can place “long” or “short” trades. 

Traders opening “long” positions speculate that the price of a metal will go up; traders opening 

“short” positions speculate that the price of a metal will go down. As is common in futures 

trading, Monex gives Atlas account traders the option to place “stop” or “limit” orders to manage 

their trading positions. Many customer accounts engage in short-term trading. For example, 

during the review period approximately 25% of trading positions opened by leveraged Atlas 

customer accounts were opened and closed within two weeks. 

30. Monex, through its website and salespersons, solicits and accepts trading orders 

from customers by telephone. Monex executes Atlas transactions by recording the trades in its 

database. Monex confirms the execution of Atlas transactions by sending customers trade 

confirmations. 

31. Monex monitors the “equity” in each Atlas account – the value of a customer’s 

metal less their “loan balance” at Monex. An Atlas account’s equity fluctuates along with the 

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movement in metals prices associated with the account’s open trading positions, less accrued 

interest and service fees. If equity in a customer’s trading account declines to Monex’s “call” 

level, Monex can issue a margin call and require its customer to immediately deposit additional 

funds to raise the equity level above Monex’s initial margin requirement. Monex can change its 

margin requirements at any time in its sole discretion. 

32. Trading positions are subject to what Monex calls “forced liquidation,” meaning 

that the trading positions can be liquidated without notice to the customer. If an Atlas 

customer’s account equity drops to 7%, trading positions are automatically force liquidated. 

Monex also can liquidate a customer’s trading position at any time in its sole discretion without 

further notice to the customer. 

33. During the review period, out of 12,000 leveraged Atlas accounts, more than 

3,000 were subject to a margin call, and at least 1,850 had trading positions force-liquidated. 

Consequently, during that five-year and eight-month time period, approximately 30% of 

Monex’s leveraged Atlas customer accounts either received a margin call, were subject to forced 

liquidation of trading positions, or both. 

34. Monex controls all aspects of its trading platform, including the price for every 

trade. Generally, Monex sets prices by tracking the spot prices of precious metals traded on 

CME Group’s COMEX and NYMEX contract markets, but Monex imposes a substantial spread 

between its bid (to buy) and ask or offer (to sell) prices in comparison to prices on these 

regulated exchanges. 

35. During the relevant period, Monex generally imposed a 3% spread between its bid 

and ask prices for Atlas program trades (the difference between the bid price and the ask price), 

which Monex applies to the nominal value of the metal being purchased or sold. This spread 

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charge is substantial in comparison to futures trades of equivalent size on the regulated COMEX 

and NYMEX contract markets. For example, the spread between bid and ask prices for one 

COMEX silver futures contract (5,000 ounces) with one tick between the bid and ask is $0.005 

per troy ounce, equivalent to $25 per 5,000 ounces of silver. Buying and selling an equivalent 

amount of silver (5,000 ounces) on Monex’s Atlas platform with a spot price of $17 per ounce 

(the approximate price of silver during the month of June 2017) would incur a spread charge of 

approximately $2,550, or more than 100 times the spread cost of equivalent COMEX 

transactions. 

36. The bulk of Monex’s revenues come from the price spread it charges on each 

trade. According to Monex’s internal data, Monex charged approximately $95 million in price 

spread during the review period. Monex also makes money by charging commissions, service 

fees and interest on its loans to customers. According to Monex’s internal data, Monex also 

collected approximately $14 million in commissions, $6.4 million in service fees, and more than 

$57 million in interest charges, for total revenue of more than $170 million during the review 

period. 

37. Customers are not required to make monthly interest or service fee payments on 

the loans that they take out to finance trading positions. Instead, these charges typically are 

deducted from customers’ account equity each month. The effect of Monex’s interest and 

service fee charges is that the equity in a customer account is constantly eroded by additions to 

the customer’s loan balance. 

38. Monex requires its Atlas customers to sign and return an Atlas account 

agreement. The terms of the Atlas account agreement give control over the metals traded on the 

Atlas trading platform to Monex, not the Atlas customers. 

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39. Atlas customers with open trading positions do not take physical delivery of the 

precious metals that underlie their trading positions. Rather, the metals are stored in depositories 

subject to contracts between Monex and the depositories which provide Monex with exclusive 

authority to instruct the depositories as to the disposition of metals. Monex customers do not 

enter into contracts with Monex’s depositories relating to any metals traded on Monex’s Atlas 

platform, and do not have any contractual rights conferred upon them by the contracts between 

Monex and the depositories. 

40. Monex’s Atlas customers do not possess or control any metals. The only way for 

an Atlas customer to get possession of metal from Monex is to make full payment for the metals, 

request actual delivery of specific physical metals, and have Monex ship the metals to them, to a 

pick-up location, or to the customer’s agent. 

41. When an Atlas customer opens a long position, Monex claims to transfer to the 

customer ownership of all of the metals underlying his position, including the financed portion of 

the position. This “transfer,” however, is in reality just a book-entry in Monex’s records. Monex 

can close out the customer’s long position at any time in its sole discretion and at a price of 

Monex’s choosing. There is also no requirement that Monex provide notice to a customer before 

liquidating a customer’s position. 

42. In the context of a short position, Monex claims to loan the customer metals that 

the customer immediately sells back to Monex. As with a long position, the purported transfer of 

metals is in reality a book-entry in Monex’s records that Monex can close out at any time in its 

sole discretion and at a price of Monex’s choosing. 

43. During the review period, approximately 90% of leveraged Atlas account 

customers realized losses (including losses from trading, interest charges, and other fees). Total 

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net realized losses (including interest charges and fees) for all leveraged Atlas customer accounts 

during the relevant period were at least $290 million. Including unrealized profit or loss on open 

trading positions increases the loss amount to more than $325 million for the review period. A 

substantial portion of these losses were caused by fees and charges imposed by Monex. 

44. Defendants were actually aware of, or recklessly disregarded, the massive losses 

suffered by its leveraged Atlas customers. Monex does not disclose its customers’ performance 

to its customers or prospects. 

II. Monex’s Fraudulent Scheme 

45. Monex fraudulently induces customers into trading precious metals through its 

Atlas program by falsely pitching the account as a powerful and profitable way to invest, despite 

knowing that the vast majority of its leveraged Atlas program customers lose money. 

46. Taken as a whole, the overall message conveyed by Monex is that the Atlas 

program is a good, safe, secure and profitable way to invest in precious metals. In fact, the Atlas 

program is designed to enrich Monex and its owners at the expense of thousands of unwitting 

customers across the country. Monex and its sales representatives omit or fail to disclose this 

and other material information that would make its Atlas program solicitations not misleading. 

47. Monex lures customers into trading in the Atlas program by first touting the 

benefits of investing in precious metals as an asset class. Monex emphasizes the benefits and 

importance of having physical precious metals in a portfolio of investments as a hedge against 

inflation, or that physical metals are intrinsically valuable, “unlike stocks and bonds.” 

48. Monex also highlights the profitability of precious metals investments, including 

in a “Profit Opportunity” section of its website. Monex claims elsewhere on its website that 

“precious metals can offer outstanding price appreciation and profit potential,” and makes other 

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similar claims such as: “What’s more, in recent years, precious metals have also proven to be 

outstanding short-term trading vehicles, offering traders periods of outstanding profit potential as 

metals prices fluctuate, sometimes dramatically, on world markets.” 

49. After offering customers statements about the security, intrinsic value and 

profitability of physical precious metals investments, Monex tells customers that the leveraged 

Atlas program is one way to achieve the security and profitability associated with physical 

precious metals investing. 

50. For example, Monex claims in its brochure for the Atlas Account which is 

distributed to prospects and Atlas customers, that: 

a.	 The Atlas program is a “unique and powerful way to acquire precious metals with 

the strength of investment leverage combined with the safekeeping security of 

independent depository storage.” 

b.	 By investing in precious metals through the Atlas program you can “protect 

yourself from further declines in the value of the U.S. dollar.” 

c.	 The Atlas program is a way to “shield your wealth against the ravaging effects of 

inflation, deflation and other economic calamities.” 

d.	 “[R]ight now may be an ideal time to invest in precious metals with the power 

and built-in security of the Atlas Account.” 

51. Similarly, Monex’s website describes the Atlas Account as “a way to purchase 

precious metals using up to 4-to-1 investment leverage” and as a “powerful short-term trading 

vehicle during periods of rapidly changing precious metals prices.” 

52. These claims were false or misleading because Monex knew or recklessly 

disregarded that approximately 90% of its leveraged Atlas customers lost money, in many cases 

suffering catastrophic losses. Monex further knew or recklessly disregarded that these customers 

never acquired any metals from Monex and therefore received neither security nor intrinsic value 

from their investment. 

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53. Monex has a vast amount of customer transactional information at its disposal. 

Monex closely monitors its Atlas customers’ trading and the losses suffered by its customers. 

Among other statistics, Monex monitors the value of open trading positions, available cash, and 

customer profits or losses. 

54. For example, in a daily “Position Report,” Monex captures a detailed snapshot of 

each Atlas customer account with information including the account’s equity, cushion before a 

margin call, available cash, trading position value, and the profit or loss on trading positions. In 

its “Position Report Summary,” Monex tracks information for each Atlas customer account 

including the number of trades executed by the account, profits or losses, the number of long 

versus short trades, the total market value of trading positions for each account, and available 

equity for additional trades. A “Customer Unrealized Loss” report shows Atlas customer 

account unrealized losses, realized profits or losses and the market value of open trading 

positions. 

55. Monex keeps a database of Atlas transactional data. Using that database, Monex 

circulates reports to management, including defendants Louis and Michael Carabini, 

summarizing the data. These reports demonstrate that leveraged Atlas trading is not a “unique 

and powerful way to acquire precious metals,” or a way to “protect” and “shield” wealth, or an 

“outstanding short-term trading vehicle” with “outstanding profit potential.” 

56. In its Atlas Account brochure, Monex also misleadingly tells customers and 

prospects in written marketing materials that: 

a.	 “The depository custodian will maintain the safekeeping of your precious metals 

until you decide to sell them or take personal possession.” 

b.	 “Your metals are your sole assets.” 

c. “You are the sole owner of your metals and the sole decision maker on when to 

buy and sell them.” 

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57. These claims are false and misleading because Monex can liquidate its Atlas 

customers’ trading positions at any time in Monex’s sole discretion, and during the relevant 

period significant numbers of leveraged Atlas customers experienced margin calls and forced 

liquidations. 

58. Reports from Monex’s database circulated to management, including defendants 

Louis and Michael Carabini, summarizing the data, show that customer trading positions 

frequently are liquidated without customer consent. For example, Monex generates “Forced 

Liquidations” and “Equity Calls” reports that reflect the number of forced liquidations and 

margin calls issued during a month. Monex has an “auto-force sell” feature in its system that 

automatically liquidates customer trading positions on a pool-wide basis if there is a sudden price 

move causing equity in trading accounts to drop below the force liquidations level. 

59. Monex sales training materials encourage sales representatives to lure prospects 

into Atlas trading by emphasizing profit potential and security. For example, Monex sales 

representatives were trained during the relevant period to use phrases on sales calls such as: 

a.	 If gold were to increase in value by $100 per ounce in the next year, and you had 

a 30% to 40% net gain, you’d feel pretty good, wouldn’t you?” 

b.	 “I’d like to show you some ways that you might earn a very positive return on 

investments in precious metals today.” 

c.	 “Discover an opportunity to invest with defined risk, while enjoying the 

possibility of unlimited upside potential.” 

d.	 “Would you like the potential to earn an annualized rate of return of 20% or more 

on your money?” 

e.	 “Since you’re looking for short term profit, but with defined risk, I think you’re 

going to love the proposal I have for you.” 

60. Such claims are false or misleading, because, for example, Monex knew or 

recklessly disregarded the fact that during the relevant period leveraged Atlas customers who 

experienced a “30% to 40% net gain” in a year or experienced a “very positive return” were 

exceedingly rare, and instead most leveraged Atlas customers lost money. 

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61. Many of Monex’s most egregious misrepresentations to customers are made in 

unrecorded sales calls, where Monex sales representatives overcome reluctance to invest by 

systematically downplaying the true risk of loss and maximizing the profit potential of investing 

through the Atlas program, and misrepresenting the nature of Monex’s relationship with its 

customers. 

62. Monex sales representatives tell prospects and Atlas customers that investing in 

the Atlas program is low risk, safe, and secure, when in fact investing in precious metals on 

leverage in the Atlas Program is highly likely to result in the loss of customer funds, including in 

substantial part through commissions and spreads that Monex itself pockets. 

63. Sales representatives tell prospects and Atlas customers that because they are 

investing in physical metals, their investments in the Atlas program will always be worth 

something because while the value of precious metals fluctuates, metals have always maintained 

intrinsic value. Sales representatives do not explain that because of leverage in the Atlas 

program, customers can lose their entire investments, or that the metals that customers 

supposedly “own” can be force liquidated by Monex without notice. 

64. Monex training materials teach sales representatives to “close” sales with pitches 

designed to earn the trust of prospective customers, through language emphasizing profit 

potential and protection against losses. Training videos used with sales representatives discuss 

overcoming hesitancy expressed by prospects by explaining that they have a fiduciary 

relationship to Atlas customers analogous to the relationship between a lawyer and her client, 

and that everything they do as sales representative will be in the prospect’s, or customer’s, best 

interest. Sales representatives follow their training and make these claims to prospects and Atlas 

customers. These claims are false, as Monex does not act as a fiduciary for its customers. 

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65. Despite the ready availability of transactional data showing significant losses 

being suffered by Atlas customers, and in particular losses in accounts with higher leverage 

ratios, Monex trains and incentivizes its sales representatives to encourage prospects to open 

Atlas trading accounts, and to encourage frequent leveraged trading in these accounts. 

66. Monex tells its newly hired account representative that a fundamental “key to 

success” is “to build a large book of clients that trade metals.” Trainees are encouraged to 

“Raise Money!,” “Have a sense of URGENCY,” and “Ask for the order on every call.” 

67. Monex’s compensation structure for sales representatives reinforces the need to 

open Atlas accounts and encourage leveraged trading in these accounts. Sales representatives 

(and Monex) make more money if they get customers to open and place leveraged trades in Atlas 

accounts. The higher the volume and dollar amount of trades, the more commissions and 

bonuses Monex sales representatives make. The higher the volume and dollar amount of trades, 

the more spread revenue Monex makes. The higher the loan and transaction amount, the more 

interest and service fees Monex can charge. 

68. The result of the foregoing is that numerous customers in this district and 

elsewhere are defrauded into investing in the Atlas program, where many invariably suffer 

significant financial losses. For example: 

A. Customer A is a 61-year-old woman with limited English skills residing in 

Charlotte, North Carolina. After her son was killed while serving with the U.S. 

military in Iraq, she received approximately $400,000 from her son’s governmentissued life insurance policy. She called Monex in the spring of 2011, looking for 

a safe and secure place to hold some of those funds, which represented her life 

savings. Customer A’s Monex account representative told her that buying 

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precious metals from Monex was a safe and secure investment. The 

representative promised her that he would provide her with investment advice 

about the precious metals market and would watch her account every day. The 

sales representative promised that profits on her investment would cover any fees 

that Monex charged. Customer A sent Monex $173,500 in April and May 

2011. Over a two year period, Customer A’s account representative made all 

trading decisions and placed numerous leveraged trades in her account, all the 

while telling Customer A that he was an expert in the metals market and that he 

was handling her money in the safest and best way possible. Ultimately, 

Customer A lost almost all of the money she invested with Monex. 

B. Customer B is a 77-year-old man residing in Texas. He contacted Monex in 

August 2009 seeking a way to protect his and his wife’s life savings from a 

downturn in the financial markets. Customer B’s Monex account representative 

recommended an Atlas account for Customer B and his wife. The account 

representative said that Monex would act as their trader or stockbroker, watching 

the market and taking appropriate steps to protect their investment if the market 

moved. The account representative downplayed the risks of investing in the 

precious metals market, telling Customer B and his wife that they could not lose 

their investment because they were buying “real metal,” would always own that 

metal, and the metal would “always be worth something” and the account would 

therefore “never go to zero.” The account representative never disclosed the true 

risks of investing on leverage in an Atlas account. Customer B invested his and 

his wife’s entire life savings of approximately $400,000 with Monex. Over the 

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life of the account, Monex made all trading decisions. Often the account 

representative used high-pressure sales tactics to obtain Customer B’s verbal 

consent to enter trades. Customer B did not understand that he was trading on 

leverage. In 2013, Monex told Customer B that “things had gone crazy” in the 

metals market. In April 2013, Customer B received back only $8,900 out of the 

initial $400,000 investment. 

C. Customer C is a 45-year-old woman residing between Los Angeles and New York 

City. In early 2011, she called Monex seeking a low-risk investment in precious 

metals that would preserve her life savings of approximately $100,000. Customer 

C’s Monex account representative convinced her to invest in Monex’s Atlas 

Program, promising a 10% return by the end of the year, if not 20% or more. The 

Monex representative downplayed the risks of the Atlas Program, telling 

Customer C that she could not lose her investment because gold had never gone 

down in price dramatically in 30 years, and “because it’s gold, it will never be 

worth nothing. Gold will always have value, so you can’t lose your investment.” 

The Monex account representative said that investing in Monex was “As safe as 

having [her] money in a savings account.” Customer C told the Monex 

representative that she could not afford to take any losses, and the representative 

assured her that the Atlas account was safe and secure. Customer C invested 

approximately $74,000, and ultimately lost all but approximately $29,000 of her 

investment. 

D. Customer D is a 54-year-old woman residing in Newport Beach, California. In 

August 2013, Customer D sent her entire retirement savings of more than $1 

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million to Monex, after a sales representative promised her that her investment 

would be safe, that investing with Monex was low-risk, and that she and Monex 

were experts and would watch the market for her and manage the investment. 

The account representative began trading Customer D’s funds on leverage, 

without explaining what she was doing or adequately disclosing the risks of 

leveraged Atlas account trading. Customer D did not understand that her account 

was trading on leverage. The account representative told her that she needed to 

verbally consent to the trades that the representative was placing, and to just say 

yes to the technical, jargon-filled questions the trade confirmation desk posed to 

her. In less than a year and a half, Customer D’s account lost more than 

$760,000. 

E. Customer E is a 69-year-old dual citizen of the United States and Italy, residing in 

Italy. After inheriting gold coins from her father, Customer E contacted Monex in 

late 2012. Customer E sent Monex the coins, then valued at nearly $175,000, 

communicating that she wanted Monex to hold them. Customer E’s Monex 

account representative told her that the Atlas account was a fairly safe way to 

speculate in the metals market, and she could earn up to four times her investment 

by using her gold to trade. Customer E said she did not want to speculate with her 

gold coins and stressed that she could take no risks with the coins, but agreed to 

separately send Monex a check for $10,000 to give the Atlas account a try (which 

she never did send). Contrary to Customer E’s wishes and without her realizing 

what Monex was doing, the account representative used the coins as collateral for 

a loan that ultimately reached nearly $600,000. Customer E told Monex that she 

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could not understand the account statements sent to her, but the account 

representative assured her that she could trust him and he assured her that her 

account was being well handled. When Customer E requested to withdraw 

$40,000 in May 2015, she learned that account held only approximately $37,700, 

and that the rest had been lost in speculative leveraged silver trading. 

69. In the end, trading in an Atlas account is not the safe, secure profitable investment 

that Monex portrays it to be. Monex misrepresents the true profit potential and risk of loss in 

leveraged Atlas trading when it knows or should know customers are highly likely to lose money 

in these transactions. Customers are lured into a trap that is structured to enrich Monex, and the 

customers stand little chance of escaping. 

VIOLATIONS OF THE COMMODITY EXCHANGE ACT 

COUNT ONE AGAINST ALL DEFENDANTS
 

Off-Exchange Transactions in Violation of Section 4(a) of the CEA 

70. Paragraphs 1 through 70 are re-alleged and incorporated herein by reference. 

71. Between July 16, 2011, and the present, Monex Deposit Company, Monex Credit 

Company, and Newport Service Corporation (“Monex”), both individually and also operating as a 

common enterprise, and acting through various officer, employees or agents, violated Section 4(a) 

of the CEA, 7 U.S.C. § 6(a) (2012), by (a) offering to enter into, (b) entering into, (c) executing, 

and (d) confirming the execution of retail commodity transactions; and (e) by conducting an 

office or business in the United States for the purpose of soliciting, accepting any order for, or 

otherwise dealing in retail commodity transactions. 

72. Defendants Louis Carabini and Michael Carabini violated Section 4(a) of the 

CEA, 7 U.S.C. § 6(a), by conducting an office or business in the United States for the purpose of 

soliciting, accepting any order for, or otherwise dealing in retail commodity transactions. 

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73. The retail commodity transactions were offered, entered into and executed on a 

leveraged or margined basis, or were financed by the offeror, the counterparty, or a person acting 

in concert with the offeror or counterparty on a similar basis. 

74. The retail commodity transactions were offered to, entered into and executed with 

persons who are not eligible contract participants or eligible commercial entities and who are not 

engaged in a line of business related to precious metals. 

75. The retail commodity transactions were not made or conducted on, or subject to, 

the rules of any board of trade, exchange, or contract market. 

76. The acts, omissions, and failures of Louis Carabini and Michael Carabini and 

other officials, agents, or persons acting for Monex described in this Complaint occurred within 

the scope of their employment, agency, or office with Monex, and are deemed to be the acts, 

omissions, and failures of Monex by operation of Section 2(a)(1)(B) of the CEA, 7 U.S.C. 

§ 2(a)(1)(B) (2012), and Regulation 1.2, 17 C.F.R. § 1.2 (2017). 

77. Louis Carabini and Michael Carabini controlled Monex and did not act in good 

faith, or knowingly induced, directly or indirectly, the acts constituting Monex’s violations 

alleged in this count. As a result, pursuant to Section 13(b) of the CEA, 7 U.S.C. § 13c(b) 

(2012), Louis Carabini and Michael Carabini are liable for Monex’s violations as controlling 

persons. 

78. Each act of offering to enter into, entering into, executing, confirming the 

execution of, or conducting any office or business anywhere in the United States for the purpose 

of soliciting, accepting any order for, or otherwise dealing in any transaction in, or in connection 

with, retail commodity transactions, other than on or subject to the rules of a board of trade that 

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has been designated or registered by the Commission as a contract market, is alleged as a 

separate and distinct violation of Section 4(a) of the CEA, 7 U.S.C. § 6(a). 

COUNT TWO 

AGAINST ALL DEFENDANTS
 

Fraud in Violation of Section 4b(a)(2)(A) and (C) of the CEA 

79. Paragraphs 1 through 70 are re-alleged and incorporated herein by reference. 

80. Between July 16, 2011 and the present, Monex Deposit Company, Monex Credit 

Company, and Newport Service Corporation (“Monex”), both individually and also operating as a 

common enterprise and acting through various officer, employees or agents, has (a) cheated or 

defrauded retail customers, or (b) has attempted to cheat or defraud retail customers, or (c) has 

willfully deceived or attempted to deceive retail customers in regard to orders for, or the 

disposition or execution of, retail commodity transactions. 

81. As more specifically set forth in paragraphs 46 through 70, Monex made material 

misrepresentations to its customers about the safety, security and profit potential of trading on its 

Atlas trading platform, and hid or failed to disclose material information necessary to make those 

representations not misleading in any material respect. 

82. Monex made these representations knowingly or with a reckless disregard to their 

truth or falsity. Monex made these omissions knowingly, or with a reckless disregard for the 

misleading description of the Atlas trading platform resulting from its failures to disclose 

material information. 

83. Pursuant to Section 2(c)(2)(D)(iii) of the CEA, 7 U.S.C. § 2(c)(2)(D)(iii) (2012), 

the retail commodity transactions are subject to Section 4b of the CEA, 7 U.S.C. § 6b (2012), as 

if they are contracts of sale of a commodity for future delivery. 

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84. Therefore, as a result of the foregoing conduct, Monex has violated Section 

4b(a)(2)(A) and (C) of the CEA, 7 U.S.C. § 6b(a)(2)(A), (C) (2012). 

85. The acts, omissions, and failures of Louis Carabini and Michael Carabini, and 

other officials, agents, or persons acting for Monex described in this Complaint have occurred 

within the scope of their employment, agency, or office with Monex, and are deemed to be the 

acts, omissions, and failures of Monex by operation of Section 2(a)(1)(B) of the CEA, 7 U.S.C. 

§ 2(a)(1)(B) (2012), and Regulation 1.2, 17 C.F.R. § 1.2 (2017). 

86. Louis Carabini and Michael Carabini controlled Monex and have not acted in 

good faith or have knowingly induced, directly or indirectly, the acts constituting Monex’s 

violations alleged in this count. As a result, pursuant to Section 13(b) of the CEA, 7 U.S.C. 

§ 13c(b) (2012), Louis Carabini and Michael Carabini are liable for Monex’s violations of 

Section 4b(a)(2)(A) and (C) of the CEA, 7 U.S.C. § 6b(a)(2)(A), (C), as controlling persons. 

87. Each act of cheating or defrauding or attempting to cheat or defraud retail 

customers, willfully making or causing to be made to retail customers false reports or statements, 

or willfully deceiving or attempting to deceive retail customers in regard to orders for, or the 

disposition or execution of, retail commodity transactions, is alleged as a separate and distinct 

violation of Section 4b(a)(2)(A) and (C) of the CEA, 7 U.S.C. § 6b(a)(2)(A), (C). 

COUNT THREE
 

AGAINST ALL DEFENDANTS
 

Fraud in Violation of Section 6(c)(1) of the CEA and Regulation 180.1(a)(1)-(3) 

88. Paragraphs 1 through 70 are re-alleged and incorporated herein by reference. 

89. Between August 15, 2011 and the present, Monex Deposit Company, Monex 

Credit Company, and Newport Service Corporation (“Monex”), both individually and also 

operating as a common enterprise and acting through various officer, employees or agents, has 

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intentionally or recklessly, in connection with contracts of sale of commodities in interstate 

commerce, 

A. used or employed, or attempted to use or employ, a scheme or artifice to defraud; 

B. made, or attempted to make, in connection with contracts of sale of commodities 

in interstate commerce, untrue or misleading statements of material fact, or omitted to state 

material facts necessary to make the statements made not untrue or misleading; and/or 

C. engaged in, or attempted to engage in, acts, practices, or a course of business that 

operated or would operate as a fraud or deceit on Monex’s customers. 

90. As a result of the foregoing conduct, Monex’s fraudulent conduct violated Section 

6(c)(1) of the CEA, 7 U.S.C. § 9(1) (2012), and Regulation 180.1(a)(1)-(3), 17 C.F.R. 

§ 180.1(a)(1)-(3) (2017). 

91. The acts, omissions, and failures of Louis Carabini and Michael Carabini and 

other officials, agents, or persons acting for Monex described in this Complaint have occurred 

within the scope of their employment, agency, or office with Monex, and are deemed to be the 

acts, omissions, and failures of Monex by operation of Section 2(a)(1)(B) of the CEA, 7 U.S.C. 

§ 2(a)(1)(B) (2012), and Regulation 1.2, 17 C.F.R. § 1.2 (2017). 

92. Louis Carabini and Michael Carabini controlled Monex and have not acted in 

good faith or have knowingly induced, directly or indirectly, the acts constituting Monex’s 

violations alleged in this count. As a result, pursuant to Section 13(b) of the CEA, 7 U.S.C. 

§ 13c(b) (2012), Louis Carabini and Michael Carabini are liable for Monex’s violations of 

Section 6(c)(1) of the CEA, 7 U.S.C. § 9(1), and Regulation 180.1(a)(1)-(3), 17 C.F.R. 

§ 180.1(a)(1)-(3), as controlling persons. 

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93. Each use or employment or attempted use or employment of any manipulative 

device, scheme, or artifice to defraud; untrue or misleading statement of fact, omission of 

material fact necessary to make statements not untrue or misleading; or act of engaging, or 

attempting to engage, in acts, practices or courses of business that operated or would have 

operated as a fraud or deceit on Monex’s customers is alleged as a separate and distinct violation 

of Section 6(c)(1) of the CEA, 7 U.S.C. § 9(1), and Regulation 180.1(a)(1)-(3), 17 C.F.R. 

§ 180.1(a)(1)-(3). 

COUNT FOUR 

AGAINST ALL DEFENDANTS
 

Violation of Section 4d of the CEA for Failure to Register 

with Respect to Financed Transactions 

94. Paragraphs 1 through 70 are re-alleged and incorporated herein by reference. 

95. The CEA defines a “futures commission merchant” to include any individual, 

association, partnership, corporation, or trust that, among other things, is engaged in soliciting or 

accepting orders for any agreement, contract, or transaction described in Section 2(c)(2)(D)(i) of 

the CEA, 7 U.S.C. § 2(c)(2)(D)(i) (2012), or acts as a counterparty to such transaction, and in or 

in connection with that activity accepts any money, securities, or property (or extends credit in 

lieu thereof) to margin, guarantee, or secure any trades or contracts that result or may result 

therefrom. Section 1a(28)(A) of the CEA, 7 U.S.C. § 1a(28)(A)(2012). 

96. Between July 16, 2011 and the present, Monex Deposit Company, Monex Credit 

Company, and Newport Service Corporation (“Monex”), both individually and also operating as a 

common enterprise and acting through various officer, employees or agents, accepted orders for 

agreements, contracts, or transactions described in Section 2(c)(2)(D)(i) of the CEA, 7 U.S.C. § 

2(c)(2)(D)(i), and acted as the counterparty to Atlas transactions, and in connection with that 

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conduct accepted money and property (or extended credit in lieu thereof) to margin, guarantee or 

secure the these trades or contracts. 

97. Section 4d(1) of the CEA, 7 U.S.C. § 6d(1) (2012), provides that “[it] shall be 

unlawful for any person to be a futures commission merchant unless— such person shall have 

registered . . . with the Commission as such futures commission merchant.” 

98. Between July 16, 2011 and the present, Monex failed to register with the 

Commission as a futures commission merchant and has therefore violated Section 4d of the 

CEA, 7 U.S.C. § 6d. 

99. The acts, omissions, and failures of Louis Carabini and Michael Carabini and 

other officials, agents, or persons acting for Monex described in this Complaint have occurred 

within the scope of their employment, agency, or office with Monex and are deemed to be the 

acts, omissions, and failures of Monex by operation of Section 2(a)(1)(B) of the CEA, 7 U.S.C. 

§ 2(a)(1)(B) (2012), and Regulation 1.2, 17 C.F.R. § 1.2 (2017). 

100. Louis Carabini and Michael Carabini have controlled Monex and have not acted 

in good faith or have knowingly induced the acts constituting the violations of Monex described 

in this Count. Pursuant to Section 13(b) of the CEA, 7 U.S.C. § 13c(b) (2012), Louis Carabini 

and Michael Carabini are therefore liable as controlling persons for Monex’s violations of 

Section 4d of the CEA, 7 U.S.C. § 6d. 

RELIEF REQUESTED 

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

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

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A. Find Defendants liable for violating Sections 4(a), 4b(a)(2)(A), (C), 4d, and 

6(c)(1) of the CEA, 7 U.S.C. §§ 6(a), 6b(a)(2)(A),(C), 6d, 9(1) (2012), and Regulation 

180.1(a)(1)-(3), 17 C.F.R. § 180.1(a)(1)-(3) (2017). 

B. Enter an order of permanent injunction enjoining Defendants and all persons 

insofar as they are acting as Defendants’ agents, servants, employees, successors, assigns, and 

attorneys, and all persons insofar as they are acting in active concert or participation with 

Defendants who receive actual notice of such order by personal service or otherwise, from 

directly or indirectly: 

1. Engaging in conduct in violation of Sections 4(a), 4b(a)(2)(A), (C), 4d, and 6(c)(1) of the 

CEA, 7 U.S.C. §§ 6(a), 6b(a)(2)(A), (C), 4d, 9(1), and Regulation 180.1(a)(1)-(3), 

17 C.F.R. § 180.1(a)(1)-(3); 

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

Section 1a of the CEA, 7 U.S.C. § 1a (2012)); 

3.	 Entering into any transactions involving “commodity interests” (as that term is defined in 

Commission Regulation 1.3(yy), 17 C.F.R. § 1.3(yy) (2017)), for Defendants’ own 

accounts or for any account in which they have a direct or indirect interest; 

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

5. 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; 

6. Soliciting, receiving, or accepting any funds from any person for the purpose of 

purchasing or selling any commodity interests; 

7. Applying for registration or claiming exemption from registration with the Commission 

in any capacity, and engaging in any activity requiring such registration or exemption 

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from registration with the Commission, except as provided for in Regulation 4.14(a)(9), 

17 C.F.R. § 4.14(a)(9) (2017); and/or 

8. Acting as a principal (as that term is defined in Regulation 3.1(a), 17 C.F.R. § 3.1(a) 

(2017)), agent, or any other officer or employee of any person (as that term is defined in 

Section 1a(38) of the CEA, 7 U.S.C. § 1a(38)) registered, exempted from registration, or 

required to be registered with the Commission, except as provided for in Regulation 

4.14(a)(9), 17 C.F.R. § 4.14(a)(9) (2017); 

C. Enter an order requiring Defendants to disgorge to any officer appointed or 

directed by the Court, or directly to customers, all benefits received, including, but not limited to, 

salaries, commissions, loans, fees, revenues, and trading profits derived, directly or indirectly, 

from acts or practices which constitute violations of the CEA as described herein, including prejudgment and post-judgment interest; 

D. Enter an order requiring Defendants, as well as any of their successors, to make 

full restitution, pursuant to such procedure as the Court may order, to every person or entity 

whose funds were received or utilized by them in violation of the provisions of the CEA and/or 

Regulations, as described herein, plus pre-judgment interest thereon from the date of such 

violations, plus post-judgment interest; 

E. Enter an order directing Defendants and any successors thereof to rescind, 

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

implied or express, entered into between Defendants and any of the customers whose funds were 

received by Defendants as a result of the acts and practices which constituted violations of the 

CEA as described herein and restore to each customer the full amount of his or her original 

investment; 

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F. Enter an order directing each Defendant to pay a civil monetary penalty in the 

amount of not more than the greater of: (1) triple the monetary gain to Defendants for each 

violation of the CEA or Regulations; or (2) $170,472 for each violation of the CEA or 

Regulations; 

G. Enter an order requiring Defendants to pay costs and fees as permitted by 

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

H. Enter an order providing such other and further relief as this Court may deem 

necessary and appropriate under the circumstances. 

Date: September 6, 2017 Respectfully submitted, 

/s Carlin R. Metzger 

Carlin R. Metzger (cmetzger@cftc.gov)

 Senior Trial Attorney

 Michael D. Frisch (mfrisch@cftc.gov)

 Trial Attorney 

Eric L. Schleef (eschleef@cftc.gov)

 Trial Attorney 

Joseph A. Konizeski (jkonizeski@cftc.gov)

 Chief Trial Attorney 

Scott R. Williamson 

(swilliamson@cftc.gov)

 Deputy Regional Counsel 

 Rosemary Hollinger (rhollinger@cftc.gov)

 Deputy Director 

 Commodity Futures Trading Commission 

 525 West Monroe Street, Suite 1100 

 Chicago, Illinois 60661 

(312) 596-0536 (Metzger) 

(312) 596-0700 (main office number) 

(312) 596-0714 (facsimile) 

32