Office of Proceedings 

U.S. COMMODITY FUTURES TRADING COMMISSION 

Three Lafayette Centre 

1155 21st Street, NW, Washington, DC 20581 

www.cftc.gov 

In the Matter of: 

* 

* 

* 

* 

* 

Robert A. Christy, and 

Crabapple Capital Group LLC, 

Registrants. * 

* 

CFTC Docket No. SD 13-01 

INITIAL DECISION ON DEFAULT 

Before: Philip V. McGuire, 

Commodity Futures Trading Commission 

Appearances: Jo Mettenburg, Esq., Senior Trial Attorney 

Background 

Division of Enforcement, Commodity Futures Trading Commission 

4900 Main Street, Suite 500, Kansas City, Missouri 64112 

By motion dated March 27, 2013, the Commission's Division of Enforcement 

("Division") has moved for entry of a default judgment against registrants Robert A. Christy 

("Christy") and Crabapple Capital Group LLC ("Crabapple"), pursuant to Commission rules 

3.60(g) and 10.93, 17 C.F.R. §§ 3.60(g) and 10.93 (2012), based on the failure ofChristy and 

Crabapple to answer, or otherwise to appear or respond to, the Notice oflntent to Revoke the 

Registrations of Crabapple Capital Group LLC and Robeli A. Christy, issued by the Commission 

on January 28, 2013 ("Notice"). Christy, a Georgia resident, is registered with the Commission 

as an associated person with, and listed as the sole principal of, Crabapple, a Georgia limited 

liability company registered with the Commission as a commodity pool operator and commodity 

trading advisor. 
The Commission's Notice alleges that Christy and Crabapple are subject to 

statutory disqualification from Commission registration based on the Consent Order for 

Permanent Injunction, Civil Monetary Penalty, and Other Equitable Relief entered by the 

U.S. District Court for the Northern District of Georgia, Atlanta Division, on October 16, 

2012 ("Consent Order"). In the Consent Order, the Comi found that Christy and 

Crabapple, October 2008 through April2012, had violated various provisions of the 

Commodity Exchange Act ("Act") and Commission regulations by fraudulently soliciting 

pool participants, making materially false and misleading statements to pool participants, 

and fraudulently misappropriating over $1 million of retail foreign currency ("forex") 

pool participant funds for business and personal expenses. The Court imposed permanent 

trading and registration bans on Christy and Crabapple, and ordered Christy and 

Crabapple to pay over $1.8 million in restitution and a $1.5 million civil monetary 

penalty. CFTC v. Crabapple Capital Group LLC and Robert A. Christy Case No. 1:12-

cv-01346-RWS (N.D. Ga.) ("CFTC v. Crabapple"). 

On January 30, 2013, the Commission's Office of Proceedings served the Commission's 

Notice on Christy at his last registered address 1 and on Crabapple at its last registered address. 2 

1 Christy's last listed address with the Commission is: 217 Roseviiie Place, Milton, Georgia, 30004. See NF A 

records, attachment to Jung Affidavit and Certification, Exhibit 2, Division's motion. According to the U.S. Post 

Office website, although Milton, Georgia is an "acceptable city" in zip code 30004 for mail delivery purposes, the 

"preferred city" in zip code 30004 is Alpharetta, Georgia. See link: 

https:l/tools.usps.com/go/ZipLookupResultsAction! input.action?resultMode=2&companyN ame=&a 

ddressl=&address2=&city==&state=Select&urbanCode=&postalCode=30004&zip=. 

Accordingly, the Commission's Notice was served on Christy at the presumably most reliable version of his last 

listed address: 217 Rossviiie Place, Alpharetta, Georgia, 30004. In this connection, the Post Office reported both 

the Commission's Notice and the Default Notice as successfuiiy "Delivered" to Christy. In light of these successful 

deliveries, Christy wiii continue to be served at the Alpharetta address. 2 Crabapple's last listed address with the Commission is 12600 Deerfield Pkwy., Suite 100, Milton Georgia, 30004. 

See NFA records, attachment to Jung Affidavit and Certification, Exhibit 2, Division's motion. The Commission's 

Notice sent to this address was returned by the Post Office as "Undeliverable as Addressed." In light of the Post 

Office guidance described above in footnote I, the Default Notice was mailed to Crabapple at the same street 

address and same zip code, but to the preferred city for that zip code: Alpharetta, Georgia. An additional copy of 

2 
Thus, Christy and Crabapple were properly served pursuant to CFTC rule 3.50.3 

Christy and Crabapple did not respond to the Commission's Notice. Therefore, on March 

7, 2013, I issued a Default Notice finding that Christy and Crabapple were in default, and setting 

deadlines for the Division to file a,motion for entry of a default judgment and for Christy and 

Crabapple to file any opposition to the Division's motion. Christy and Crabapple have not 

responded to the Default Notice or to the Division's motion. Accordingly, this matter is ripe for 

entry of a default judgment. 

As a result of their defaults, Christy and Crabapple have waived a hearing on all of the 

issues and are precluded from introducing evidence of mitigation and rehabilitation which is 

necessary to rebut the strong presumption of unfitness for registration created by the findings of 

fact, conclusions of law, and sanctions in the Consent Order. As a result, the well-plead 

allegations in the Notice, as augmented by the evidence produced by the Division, and as 

supplemented by the proposed findings and conclusions in the Division's motion, are deemed 

true and conclusive for purposes of finding: one, that Christy is statutorily disqualified from 

registration under Sections 8a(2)(C) and (E) of the Act, 7 U.S.C. §§ 12a(2)(C) and (E) (Supp. IV 

2011 ); and two, that Crabapple is statutorily disqualified under Sections 8a(2)(C), (E) and (H) of 

the Default Notice was served on Crabapple in care of Christy, who is Crabapple's designated contact for 

registration, and enforcement and compliance, communications, at his Alpharetta address. In this connection, the 

Post Office reported the Default Notice as successfully "Delivered" to Crabapple at Christy's Alpharetta address. In 

light ofthis successful delivery in care of Christy, Crabapple's designated agent for service of communications from 

the Commission, Crabapple will continue to be served in care of Christy at his Alpharetta address. 3 Pursuant to CFTC rule 3.30(a), 17 C.F.R. § 3.30(a) (2012), the address of each registrant as submitted on its 

application for registration or as submitted on the biographical supplement shall be deemed to be the address for 

delivery to the registrant for any communications from the Commission, including any summons, complaint, notice 

and other written documents or correspondence, unless the registrant specifies another address for this purpose. 

CFTC rule 3.30(b ), 17 C.F.R. § 3.30(b) (2012), provides that each registrant, while registered and for two years after 

the termination of registration, must notify the National Futures Association ("NFA") of any change of address, and 

that failure to do so may result in an order of default in any Commission or NF A proceedings. Moreover, pursuant 

to CFTC rule 3 .50, 17 C.F .R. § 3.50 (20 12), for purposes of an action for the denial, suspension or revocation of 

registration, service upon a registrant will be sufficient if mailed by registered mail or certified mail return receipt 

requested properly addressed to the registrant at the address shown on his application or any amendment thereto, and 

will be complete upon mailing. 

3 
the Act, 7 U.S.C. §§ 12a(2)(C), (E) and (H) (Supp. IV 2011). Thus, as set out below, the 

Division's motion has been granted, Christy and Crabapple have been found to be unfit for 

registration and statutorily disqualified from registration, and the registrations of Christy and 

Crabapple have been revoked. 

Findings of Fact 

1. Crabapple Capital Group LLC, a Georgia limited liability company, has been 

registered with the Commission as a commodity pool operator and commodity trading advisor, 

since January 3, 2011, pursuant to Section 4m(l) of the Act, 7 U.S.C. § 6m(l) (Supp. IV 2011). 

Crabapple also has been listed with the National Futures Association as an off-exchange retail 

foreign currency ("forex") firm, since August 2012.4 Crabapple is not a financial institution, 

registered broker dealer (or their associated person), insurance company, bank holding company, 

or investment bank holding company under Section 2( c )(2)(B)(i)(II) of the Act, 7 U .S.C. 

§ 2( c )(2)(B)(i)(II) (Supp. IV 2011 ). 

2. Robert A. Christy, a Georgia resident, has been registered as an associated person of 

Crabapple, since January 3, 2011, pursuant to Section 4k(3) ofthe Act, 7 U.S.C. §6k(3) (Supp. 

IV 2011 ). Christy, the president and chief executive officer of Crabapple, has been listed as the 

sole principal, sole managing member of Crabapple and sole owner of a I 0% or more financial 

interest in Crabapple. Christy also is Crabapple's designated contact for registration, and 

enforcement and compliance, communications. 5 

3. On April 19, 2012, the Commission filed a civil injunctive complaint in the U.S. 

District Comi for the Nmthern District of Georgia, Atlanta Division against Christy and 

Crabapple. The Commission contended that Crabapple -- acting by and through Christy and 

4 NF A records, attachment to Jung Affidavit and Ce1iification, Exhibit 2, Division's motion. 

5 ld. 

4 
others -- had employed a device, scheme, or artifice to defraud forex pool participants or 

prospective patiicipants in violation ofvarious provisions of the Act, as amended by the Food, 

Conservation, and Energy Act of2008, Pub. L. No. 110-246, Title XIII (the CFTC 

Reauthorization Act of2008 ("CRA")), §§ 13102-13204, 122 Stat. 1651 (enacted June 18, 

2008), and the Dodd-Frank Wall Street Refmm and Consumer Protection Act of2010 ("DoddFrank Act"), Pub. L. No. 111-203, Title VII (the Wall Street Transparency and Accountability 

Act of2010), §§ 701-774, 124 Stat. 1376 (enacted July 21, 2010), and now codified at 7 U.S.C. 

§ 1 et seq., and in violation of various Commission's regulations, 17 C.F.R. §§ 1 et seq. (2012). 

Also on April 19, 2012, the Co uti entered an ex parte restraining order against Christy 

and Crabapple. On May 4, 2012, the Couti entered a Consent Order for Preliminary Injunction 

and Other Equitable Relief against Christy and Crabapple. 

On October 16, 2012, the Honorable Judge Richard W. Story entered a Consent Order for 

Permanent Injunction, Civil Monetary Penalty, and Other Equitable Relief ("Consent Order") 

which found, in relevant pmi, that, from October 2008 to April2012, Christy and Crabapple: 

fraudulently solicited over $1.4 million from 22 participants in a managed forex pool; 

misrepresented Christy's currency trading expetiise; falsely repmied the firm had "in excess of 

$50,000,000" under management; failed to disclose that Christy traded only a small potiion of 

the total pool funds; provided pool participants with false monthly account statements showing 

profits when, in fact, Christy had lost $172,600 of the invested funds; and commingled and 

misappropriated at least $1,054,971 of the funds for personal and business expenses. The Court 

concluded: 

• That Christy's and Crabapple's fraudulent conduct and misappropriation for the 

entire period October 2008 to April2012 violated Section 4Q(l)(A)-(B) of the 

Act, as amended by the CRA and the Dodd-Frank Act, 7 U.S.C. § 6Q(1)(A)-(B) 

(2006), and fraudulent conduct and misappropriation since at least October 18, 

5 
2010 violated CFTC rules 4.20(a), 4.20(c), 4.41(a), and 5.2(b)(1)-(3), 17 C.F.R. 

§§ 4.20(a), 4.20(c), 4.41(a), and 5.2(b)(l)-(3) (2012). 

• That Christy's and Crabapple's fraudulent conduct and misappropriation 

beginning at least in October of2008 to July 16, 2011 also violated Section 

4b(a)(2)(A)-(C) of the Act, as amended by the CRA, 7 U.S.C § 6b(a)(2)(A)-(C) 

(Supp. III 2009). 

• That Christy's and Crabapple's fraudulent conduct and misappropriation on or 

after July 16, 2011 also violated Section 4b(a)(2)(A)-(C) ofthe Act, as amended 

by the CRA and the Dodd-Frank Act, and now codified at 7 U.S.C § 6b(a)(2)(A)-

(C) (Supp IV 2011). 6 

The Court further concluded: that Christy was liable as a controlling person for Crabapple's 

violations of the Act and Commission rules, pursuant to Section 13(b) of the Act, 7 U.S.C. 

§ 13c(b) (2006); and that Crabapple was liable for the violations of its agent Christy, pursuant to 

Section 2(a)(l)(B) of the Act, 7 U.S.C § 2(a)(l)(B) (2006), and Commission rule 1.2, 17 C.F.R. 

§ 1.2 (2012). CFTC v. Crabapple. 

5. The Court pe1manently enjoined Christy and Crabapple from further violations of 

the Act and Commission regulations, including: Section 4b(a)(2)(A)-(C) of the Act, as amended 

by the CRA and the Dodd-Frank Act, and now codified at 7 U.S.C. § 6b(a)(2)(A)-(C) (Supp. IV 

2011 ); Section 4Q(l), of the Act, as amended by the CRA and the Dodd-Frank Act, and now 

codified at 7 U.S.C. § 6Q(1) (Supp. IV 2011); Section 9(a)(4) of the Act, as amended by the 

Dodd-Frank Act, and now codified at 7 U.S.C. § 13(a)(4) (Supp. IV 2011); and CFTC rules 

4.20(a) and (c), 4.41(a), and 5.2(b)(1)-(3), 17 C.F.R. §§ 4.20(a) and (c), 4.41(a), and 5.2(b)(1)-(3) 

(2012). 

The Comi also imposed permanent trading and registration bans on Christy and 

Crabapple by permanently enjoining Christy and Crabapple: (1) from trading on or subject to 

6 The Court also found that Christy and Crabapple had willfully made misrepresentations to the NF A in violation of 

Section 9(a)(4) of the Act, as amended by the Dodd-Frank Act, and now codified at 7 U.S.C. § 13(a)(4) (Supp. IV 

2011), and had violated a Membership Responsibility Action/Associate Membership Responsibility Action issued 

by the NF A on January 23, 2012. 

6 
the rules of any registered entity; (2) from entering into any transaction, controlling or directing 

the trading of, soliciting or receiving funds for the purpose of trading any commodity futures, 

options on commodity futures, commodity options, security futures products, and/or forex 

contracts ("listed instruments"), for their own accounts or any accounts in which they have a 

direct or indirect interest; (3) from having any listed instruments traded on their behalf; (4) from 

controlling or directing the trading for or on behalf of any other person in any account involving 

listed instruments; (5) from soliciting, receiving or accepting funds from any person for the 

purpose of purchasing or selling any listed instruments; and (6) from applying for registration or 

claiming exemption from registrations with the Commission and from acting as a principal, agent 

or any other officer or employee of any person registered, exempted from registration or required 

to be registered with the Commission, except as provided for in CFTC rule 4.14(a)(9), 17 C.F.R 

§ 4.14(a)(9) (2012). 

Finally, the Court also ordered Christy and Crabapple to pay over $1.8 million in 

restitution and to pay a $1.5 million civil monetary penalty. CFTC v. Crabapple. 

Discussion and Conclusions of Law 

Section 8a(2) presumption of unfitness 

Section 8a(2) of the Act, 7 U.S.C. § 12a(2) (Supp. IV 2011), sets out eight grounds for 

denial, suspension or revocation of registration, known customarily as "statutory 

disqualifications." According to the relevant House Agriculture Committee Report, each Section 

8a(2) disqualification involves a previous formal determination by a court, or the Commission or 

other government agency, that a person or firm has engaged in conduct involving "especially 

grave offenses that are clearly related to a person's [or firm's] fitness for registration with the 

Commission." H.R. repmi No. 97-565, Part I at 50 (May 17, 1982). The report further 

7 
explained that, since each Section 8a(2) disqualification is based upon a previous finding or 

order by a court, or the Commission or other governmental body, "whether or not a person is 

subject to such a disqualification generally is readily ascetiainable by checking officially 

maintained records." !d. 

In conjunction with the Commission's Part 3 rules, a Section 8a(2) disqualification 

generally operates as a strong presumption that a person or firm is conclusively unfit to do 

business in a relevant registered capacity. The Commission has noted that the strong 

presumption of unfitness for registration under Section 8a(2) of the Act rests on the commonsense inference that once an individual or firm has undertaken serious wrongdoing - as it has 

been amply demonstrated here that Christy and Crabapple have done - a substantial risk exists 

that the individual or firm will undertake similar wrongdoing in the future. See In re Akar, 

Comm. Fut. L. Rep.~ 22, 297 (CFTC February 24, 1986). The strong presumption of unfitness 

can be rebutted by a convincing showing that allowing a person or firm to become or remain 

registered will not pose a risk to the public, including, for example, mitigating circumstances, 

rehabilitation, or close supervision by another registrant. See Commission rules 3.60(b)(2)(i) and 

3.60(b)(2)(ii)(A)-(C), 17 C.F.R. §§ 3.60(b)(2)(i) and 3.60(b)(2)(ii)(A)-(C) (2012). By 

defaulting, Christy and Crabapple have precluded themselves from presenting such rebuttal 

evidence. 

Section 8a(2)(C) of the Act 

Section 8a(2)(C) of the Act, 7 U.S.C. § 12a(2)(C) (Supp. IV 2011), in relevant part, 

authorizes the Commission to revoke the registration of any person "if such person is 

permanently or temporarily enjoined by order, judgment, or decree of any comi of competent 

jurisdiction ... including an order entered pursuant to an agreement of settlement to which the 

8 
Commission ... is a patiy, from ... (i) acting as a futures commission merchant, introducing 

broker, floor broker, floor trader, commodity trading advisor, commodity pool operator, [or] 

associated person of any registrant under this Act ... or (ii) engaging in or continuing any 

activity when such activity involves ... fraud .... " Here, cause exists for statutory disqualification 

of Christy and Crabapple pursuant to Section 8a(2)(C) because the Consent Order in CFTC v. 

Christy, which was entered by the United States District Court for the Northem District of 

Georgia, Atlanta Division, a court of competent jurisdiction: one, permanently enjoins Christy 

and Crabapple from trading and from seeking re-registration; and two, permanently enjoins 

Christy and Crabapple from committing fraud in violation of the Act and Commission rules. 

Section 8a(2)(E) of the Act 

Section 8a(2)(E) of the Act, 7 U.S.C. § 12a(2)(E) (Supp. IV 2011), in relevant part, 

authorizes the Commission to revoke the registration of any person "if such person, within ten 

years preceding the filing of the application [for registration] or any time thereafter, has been 

found in a proceeding brought by the Commission ... (i) to have violated any provision of [the] 

Act. .. where such violation involves ... fraud [or] misappropriation of funds ... " Here, cause 

exists pursuant to Section 8a(2)(E), because the Consent Order in CFTC v. Christy found Christy 

and Crabapple each to have violated various provisions of the Act and various Commission rules 

for conduct involving fraud and misappropriation. 

Section 8a(2)(H) of the Act 

Section 8a(2)(H) of the Act, 7 U.S.C. § 12a(2)(H) (Supp. IV 2011), in relevant pati, 

authorizes the Commission to revoke the registration of any person if "revocation of the 

registration of any principal of such person would be warranted because of a statutory 

9 
disqualification listed in this paragraph." Section 8a(2)(H) further provides that the term 

"principal," as used in Section 8a(2), includes a general partner of a patinership or a person who 

owns more than 1 0% of the voting shares of a corporation. Because Christy is listed with the 

Commission as Crabapple's sole principal, owns more than a 10% financial interest in Crabapple, 

and is subject to the revocation of his registration pursuant to Sections 8a(2)(C) and (E), 

Crabapple's registration is also subject to revocation pursuant to Section 8a(2)(H). 

ORDER 

Robert A. Christy is statutorily disqualified from registration under Sections 8a(2)(C) and 

(E) of the Commodity Exchange Act, and Crabapple Capital Group LLC is statutorily 

disqualified under Sections 8a(2)(C), (E) and (H) of the Commodity Exchange Act. 

Accordingly: one, the Division's motion for entry of a default judgment is hereby granted; two, 

Robe1i A. Christy and Crabapple Capital Group LLC are found conclusively unfit for 

registration; and three, the registrations of Robert A. Christy and Crabapple Capital Group LLC 

are hereby revoked. 

Dated Apri/fS1~ h{ "{/ < 

Ph~cGuire, Judgment Officer 

10