Office of Proceedings 

U.S. COMMODITY FUTURES TRADING COMMISSION 


Three Lafayette Centre 


1155 21st Street, NW, Washington, DC 20581 


www.cftc.gov 

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Herbert Moskowitz, and 

Ari Moskowitz, 

Complainants, 

v. 	

Accredited Investment Mgt. Corp., 

Peter G. Catranis, and 

Russell E. Tanner, 

Respondents. 	

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) CFfC Docket Nos. 13-R15 &13-R.20 

) Served electronically 


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INITIAL DECISION ON DEFAULT 

(Peter Catranis and Accredited Investment Management Corporation) 

Appearances 

Keith Moskowitz, Esq., Eilenberg &Krause LLP, New York, NY 

For complainants Herbert Moskowitz and Ari Moskowitz 

Peter G. Catranis, prose, Tortola, British Virgin Islands 

For co-respondent Accredited Investment Management Corporation 

Introduction 

As explained below: one, respondents Peter G. Catranis ("Catranis"), and his 

firm Accredited Investment Management Corporation ("AIM"), have been found in 

default based on Catranis' refusal to participate in the scheduled oral hearing via a video 

hook-up at the Eastern Caribbean Supreme Court in Tortola, British Virgin Islands; 1 

two, Catranis has been found to have misrepresented the relative risks and rewards, and 

1 Catranis' and AIM's default does nQ1 establish the liability of co-respondent Russell Tanner. Herbert and 

Ari Moskowitz have settled with Tanner; and their complaints against Tanner will be dismissed in a 

separate order. 
commission costs, of his trading strategy, 2 in violation of Section 4b(a)(1)(A) of the 

Commodity Exchange Act ("Act"),a and Section 4c(b) of the Act4 and CFfC rule 

33.1o(a);s three, Catranis' violations have been found to have proximately caused 

Herbert Moskowitz $29,677 in damages, and proximately caused Ari Moskowitz $14,174 

in damages; four, AIM has been found liable for Cartranis' violations pursuant to 

Section 2(a)(1)(B) of the Act;6 and five Catranis and AIM have been ordered to pay 

reparations of $29,677 to Herbert Moskowitz, and $14,174 to Ari Moskowitz, plus 

prejudgment and post-judgment interest and certain costs. 

The findings and conclusions below are based on the parties' documentary 

submissions,7 and reflect adverse inferences based on Catranis' failure to produce 

2 Complainants effectively abandoned their churning claim. See paragraph 51 complainants' Response to 


Order dated December 2, 2015. 


3 Section 4b(a)(1)(A) ofthe Act, 7 USC § 6b(a)(l)(A), provides: 


It shall be unlawful for any person, in or in connection with any order to make, or the 

making of, any contract ofsale of any commodity in interstate commerce or for future 

delivery that is made, or to be made, on or subject to the rules of a designated contract 

market, for or on behalf of any other person -- to cheat or defraud or attempt to cheat or 

defraud the other person. 

4 Section 4c(b) ofthe Act, 7 USC § 6c(b), provides in pertinent part: 

No person shall offer to enter into, enter into or confirm the execution of, any transaction 

involving any commodity regulated under this chapter which is of the character of, or is 

commonly known to the trade as, an "option", "privilege", "indemnity", "bid", "offer", 

"put", "call", "advance guaranty", or "decline guaranty", contrary to any rule, regulation, 

or order ofthe Commission prohibiting any such transaction or allowing any such 

transaction under such terms and conditions as the Commission shall prescribe. 

s CITC rule 33.1o(a), 17 CFR Part 33.1o(a), provides: 

It shall be unlawful for any person directly or indirectly - to cheat or defraud or attempt 

to cheat or defraud any other person. 

6 Section 2(a)(1)(B) of the Act, 7 USC § 2(a)(1)(B), provides: 

The act, omission, or failure of any official, agent, or other person acting for any 

individual, association, partnership, corporation, or trust within the scope of his 

employment or office shall be deemed the act, omission, or failure ofsuch individual, 

association, partnership, corporation, or trust, as well as ofsuch official, agent, or other 

person. 

1 The principal documents considered include: AIM's, Catranis' and Tanner's joint answers to Herbert 

Moskowitz's and Ari Moskowitz's complaints and joint pre-hearing memorandum; Catranis' declaration 

attached to respondents' joint pre-hearing memorandum, and opposition to default judgment; Tanner's 

declaration attached to respondents' joint pre-hearing memorandum, and replies to complainants' 

requests for admissions and interrogatories; Herbert Moskowitz's complaint, declaration dated August 4, 

2015, and affidavit dated January 7, 2016; Ari Moskowitz's complaint, declaration dated August 41 2015, 

and affidavit dated January 13, 2016; account-opening documents and monthly account statements 

2 

certain documents in discoverys and failure to participate in the scheduled hearing.9 

Rule 12.35 discovery sanctions 

By Ruling dated July 30, 2015, I concluded that Catranis had offered meritless 

excuses for his failure to produce certain business and trading records in response to 

complainants' document requests, and accordingly I gave complainants an opportunity 

to file a motion in which they could produce proposed narrowly tailored sanctions 

pursuant to CFfC rule 12.35. After considering complainants' proposed sanctions and 

Catranis' opposition to sanctions, I have determined to make the following adverse 

inferences: 

1. 	 Catranis' representations before the account-openings to Herbert and Ari 

Moskowitz about the relative risks and rewards of his trading system were 

not fair and balanced. Specifically, Catranis failed to provide fair and 

accurate disclosure that he would employ a high-volume, short-term 

trading strategy that would generate substantial commissions and failed to 

disclose the significantly adverse impact ofthose substantial commissions 

on potential profitability. This adverse inference is consistent with the 

various written communications from Catranis to Herbert and Ari 

Moskowitz, none ofwhich included a meaningful disclosure of 

commissions that would be generated by his trading strategy. 

2. 	 Despite the fact that they both intended to give Catranis discretionary 

trading authority, Herbert and Ari Moskowitz did not execute any power 

of attorney ("POA''), including any POA giving Catranis limited authority 

to "roll positions and adjust hedges" as asserted by Catranis. This adverse 

inference is consistent with presumably reliable business documents 

produced by PFG and complainants. For example, on page 3 ofthe PFG 

account applications, produced by PFG, Herbert and Ari Moskowitz each 

electronically acknowledged, among other things, that he had read and 

agreed to all ofthe terms ofthe PFG customer agreement, and that he 

understood the various listed risk disclosures. The POA was not included 

produced by PFG; various e-mails produced as exhibits to complainants' pre-hearing memorandum; the 

registration and disciplinary history ofCatranis and AIM in NFA Basic; and the Opinion and Order 

Imposing Remedial Action, In the Matter ofHerbert Moskowitz, (SEC March 21, 2002) (Exhibit A to both 

answers). 

8 See Ruling dated July 30, 2015, Notice dated August 25, 2015, e-mails from Colson to Catranis dated 

September 11, 15 and 23, 2015. 

9 See Order dated December 2, 2015. 

3 

in this list of documents. In this connection, Herbert Moskowitz 

confirmed on the account application that the account was to be managed 

by Catranis, but Ari did not. In any event, both did not sign, or 

acknowledge, any powers of attorney. In connection with the opening of 

Herbert's account, Catranis informed PFG's new account department that 

"No POA'' had been executed for Herbert's account and that no letter of 

direction had been executed for Ari's account. See Catranis to Vaala emails, May 24, 2011, 11:49 AM, and July 19, 2011, 5:20 AM, Exhibits E and 

F, complainants' pre-hearing memorandum. 

3. 	 Herbert and Ari Moskowitz did not authorize Catranis to trade their 

accounts with a nominal amount of $250,000. This adverse inference is 

consistent with the fact that Catranis' communications with PFG, and with 

Herbert and Ari Moskowitz, did not clearly and explicitly state that he was 

trading the accounts with nominal or notional amounts. 

Catranis' Default 

Initially respondents AIM, Catranis and Tanner were represented by an attorney. 

However, in the midst of a discovery dispute, their attorney withdrew. Thereafter, 

Tanner, and Catranis and AIM, appeared prose. 

Throughout the course ofthis proceeding, Catranis provided a Tortola, British 

Virgin Islands address for himself and his firm AIM. Similarly, the last address that 

Catranis provided the NFA for himself and AIM was in Tortola, BVI. 

By Notice dated September 28, 2015, I scheduled an in-person hearing for 

November 18, 2015, at the CFTC office in New York, New York, and asked the parties to 

notify my office, by September 29, 2015, of any scheduling conflicts. Catranis did not 

reply to the Notice. 

By Order dated September 30, 2015, I directed Catranis to confirm his intention 

to appear at the hearing in New York. By Order dated October 1, 2015, I changed the 

hearing date to December 2, 2015, and renewed the instruction to Catranis to confirm 

his intention to appear at the hearing in New York. Each ofthe orders and notices 

4 

mentioned above, on September 28 and 30, and October 1, 2015, included warnings that 

a failure to participate in the hearing would result in adverse consequences, including 

default. After some prodding, Catranis confirmed that he would not travel to participate 

in a hearing in New York, because of restrictions placed on his passport for nonpayment of child-support, and his potential arrest and prosecution ifhe tried to re-enter 

the U.S. 

Upon consideration ofCatranis' inability or unwillingness to travel legally to and 

from the U.S., by Notice dated October 21, 2015, I informed the parties that 

arrangements had been made for Catranis to participate in the hearing via a video hookup at the Eastern Caribbean Supreme Court in Tortola, BVI.10 That Notice directed 

Catranis to confirm whether or not he intended to participate in the December 2nd 

hearing via the video hook-up. That Notice also repeated the warning about the adverse 

consequences of refusing to participate in the hearing: 

Any failure by Catranis ... to provide such timely notice: one, will be 

deemed a waiver ofthe opportunity to participate in any fashion in the 

hearing, including the opportunity to present oral testimony and to crossexamine witnesses; two, may result in adverse inferences being taken that 

the testimony not presented would have been not credible and would have 

failed to substantiate the non-appearing respondent's defenses; and three, 

may result in a default award pursuant to CFrC rule 12.304(i). 

In response, Catranis rolled out a series of unsubstantiated, implausible and 

inconsistent, and increasingly colorful, reasons why he objected to participating in the 

hearing via the BVI Supreme Court video hook-up in Tortola. First, he complained 

about the cross-town commute, insisting that he should be able to participate via Skype 

on a desk-top computer "from [his] home [in Tortola]": 

10 Co-respondent Tanner was to appear via video hook-up in the CFfC's Chicago office, and complainants 

were to appear in person before the undersigned in the CFfC's New York office. Tanner and 

complainants confirmed their intention to participate in the hearing. 

5 

Why do I have to go to the court in Tortola to testify by video. Why can't I 

participate from my home by video where I have a computer, all my 

information on the case, all notes, links and supporting data to answer any 

questions by video? I don't have a laptop and I don't want to be going into 

this blind without the information I need to support myself. What do I 

need to do to participate from home by video?" 

On October 23, my office explained why Catranis must participate in the hearing via a 

video hook-up at the BVI Supreme Court: 

The nearby BVI Supreme Court was selected as the location for your video 

hook-up for the following self-evident reasons: 

• 	 By motion dated March 4, 2014, you and your co-respondent Mr. 

Tanner requested an oral hearing, and by motion dated August 20, 

2014, you both requested that you be able to participate in the 

hearing either by telephone or video hook-up. Complainants 

requested an in-person hearing. Both sides' preferences have been 

accommodated. 

• 	 Video hook-up software that is used for personal computers, such 

as Skype, is not sufficiently reliable for the fair and orderly conduct 

of a court hearing. Moreover, your problematic personal history 

with computers does not inspire confidence in your technical skill 

and judgment. 

• 	 The office ofthe BVI Supreme Court will provide necessary 

technical support, which will free you to focus on your 

responsibilities as a litigant and a witness. 

• 	 You will be in the same boat with the other parties, who will not be 

participating in the hearing from the comfort oftheir 

homes. Rather, they will be participating in the hearing in a 

national government facility [i.e., the CFfC's Chicago and New York 

hearing rooms] that provides a proper setting for a formal 

evidentiary hearing. 

• 	 The BVI Supreme Court in Tortola is conveniently located a short 

drive from your home. Complainants are traveling substantially 

further than you are, and likely incurring greater expenses. Unlike 

complainants, you will be sleeping in your own bed. Moreover, you 

now have ample time (over five weeks) to purchase and prepare a 

laptop computer, or to print out and organize your case documents, 

for use at the hearing. Thus, by objective standards, any 

"inconvenience" that you may experience will be manageable and 

6 

reasonable, and considerably milder than any inconvenience 

experienced by the complainants. 

In light ofthe factors listed above, your objections to participating in the 

hearing by video hook-up at the BVI Supreme Court, at best, border on the 

frivolous, whingey and absurd. As you were previously advised, the c-o-b 

October 26, 2015 deadline for you to notify our office whether or not you 

intend to participate in the hearing will not be extended. This is a simple 

procedural obligation that merely requires you to provide a yes or no 

answer. 

Catranis then shifted to a new vague wandering mariner excuse that he effectively no 

longer resided in Tortola: 

Guess this makes it easy, [due] to my situation with my X and how it 

could impact my life and where I can live I won't be attending the hearing 

from the court house in Tortola. Ifyou change your mind and would like 

me to participate using my computer from where I'll be at (I work in the 

marine industcy and travel daily) I'd be happy to appear by video. Either 

way because ofthe PFG BK and fraud that has ruined my life I'll be filing 

for BK [i.e., bankruptcy] however this case is resolved, is there anything 

you need from me to accommodate this? Currently I'm not on the main 

Island ofTortola and have no intent on being there in the near future. 11 

As can be seen, Catranis failed to provide any fixed land address or itinerary, and failed 

to explain how he could participate as he sailed about without a lap-top computer which 

he previously claimed not to possess. When that excuse failed to gain traction, Catranis 

ran up a histrionic, and similarly unsubstantiated, mad Magyar claim that his ex-wife's 

Hungarian family purportedly had ties to organized crime and would harm him and his 

wife ifthey learned that he would be in Tortola on a specific date. 12 

In any event, Catranis failed to produce sufficient reliable and convincing 

evidence to establish a plausible reason for why he could not take a day to appear at the 

BVI Supreme Court. In addition, Catranis repeatedly asserted, without any 

11 Catranis October 23, 2015 e-mail to Colson. [Underlining added for emphasis.] Catranis would later 

represent that he was working as a free-lance yacht captain. 12 Page 7, Catranis' opposition to default, filed January 11, 2016. 

7 

substantiation, that he was deeply in debt and unable to satisfy any judgment, thus 

effectively making it clear that he had no intention to satisfy any judgment. 

By Notice dated October 26, 2015, I confirmed that Catranis' refusal to 

participate in the hearing via the BVI Supreme Court video hook-up constituted a waiver 

ofthe opportunity to participate in the hearing. Since respondent Russell Tanner and 

complainants Ari and Herbert Moskowitz had confirmed their intention to participate in 

the hearing, the hearing remained scheduled to be heard as scheduled. However, on 

November 30, 2015, Tanner and Ari and Herbert Moskowitz amicably settled their 

dispute. In view ofCatranis' waiver ofthe opportunity to participate in the hearing, 

coupled with his stated intention not to pay any judgment, I determined that it would be 

unfair and unreasonable to impose on complainants the substantial cost and 

inconvenience of attending the hearing, and thus cancelled the hearing. 

By order dated December 2, 2015, I found that Catranis' refusal to participate in 

the hearing was grounds for imposing the following sanctions: one, adverse inferences 

that the testimony that Catranis would have produced had he participated in the hearing 

would have been generally unreliable, and would have tended to undermine his and 

AIM's defenses; and two, a default judgment against Catranis and AIM. I noted that 

resolving the complaint against Catranis and AIM via the default procedure, and thus 

minimizing unnecessary additional expenses for complainants, was particularly 

appropriate given Catranis' repeated assertions that he would not satisfy any judgment. 

After reviewing complainants' and Catranis' arguments in support of and in opposition 

to default, I have determined to impose adverse inferences that the testimony that 

Catranis would have produced had he participated in the hearing would have been 

8 

generally unconvincing and unreliable, and would have tended to undermine his and 

AIM's defenses, and I have determined to find Catranis in default. 

Factual Findings 

The parties 

1. Herbert Moskowitz, born in 1941, a resident ofBoca Raton, .Florida, and the 

father of co-complainant Ari Moskowitz, opened the first Moskowitz account to be 

managed by Peter Catranis, after several months of discussions. Soon after his first 

contact with Catranis, but before he decided to open his account, Herbert Moskowitz 

sold his dental practice in Vermont and moved to .Florida. On his PFG account 

application, Herbert indicated that his net worth, orjoint net worth with his spouse, 

exceeded $1 million, and that his income was in excess of $200,000 in each ofthe two 

most recent years, or that his joint income with his spouse was in excess of $300,000 

for those years. Herbert Moskowitz disclosed on his account application that he had 

previous experience trading stocks, bonds, commodities, options, mutual funds, and 

forex. Herbert Moskowitz was sufficiently sophisticated to understand basic 

information reported in PFG account statements, including credits and debits, buys and 

sells, commission charges, and descriptions of contracts bought and sold, including 

contract months. 

On March 21, 2003, the Securities and Exchange Commission issued an Opinion 

and Order Imposing Remedial Action finding that "the facts are straightforward and 

establish unequivocally" that Moskowitz had failed to report his substantial beneficial 

ownership interest in securities of a publicly traded company, purchased by his son-inlaw, in violation of Section 13(d) ofthe Securities Exchange Act, 15 U .S.C. § 78m( d), and 

9 

SEC rule 13d-1, 17 C.F.R. § 13d-1. The SEC also noted that that Moskowitz is a 

"sophisticated stock promoter" who "has made a career offounding and promoting 

public companies." In the Matter ofHerbert Moskowitz, Admin. Proc. File No. 3-9435, 

(SEC March 21, 2002) (Exhibit A to joint answer). 

2. Ari Moskowitz, a resident of Baltimore, Maryland, born in 1970, is the son of 

Herbert Moskowitz. On his father's recommendation, Ari opened a PFG account to be 

managed by Catranis. Nothing in the record suggests that they did not regularly consult 

each other about the accounts after Ari opened his account. Ari Moskowitz, following in 

his father's footsteps, has a periodontal practice in Catonsville, Maryland. On his PFG 

account application, Ari checked that his annual income and net worth were both over 

$100,000, and that his liquid net worth was over $50,000. Ari Moskowitz disclosed on 

his account application that he had experience investing in stocks, bonds, options & 

mutual funds, but no experience in commodities futures or foreig"Q exchange. Ari 

Moskowitz was sufficiently sophisticated to understand basic information reported in 

PFG account statements, including credits and debits, buys and sells, commission 

charges, and descriptions of contracts bought and sold. 

3. Accredited Investment Management Group ("AIM") was a registered 

introducing broker and commodity trading advisor from 1987 to 2015 when it was 

permanently barred by the National Futures Association. AIM was located in Newport 

Beach, California until 2013, when its owner Peter Catranis moved to Tortola, British 

Virgin Islands. During the relevant time, AIM was guaranteed by Peregrine Financial 

Group, Incorporated ("PFG"), the now defunct futures commission merchant that 

carried the two Moskowitz accounts. 

10 

4. Peter Catranis, the owner and sole listed principal ofAIM, was first registered 

as an associated person in 1984, working for a series offirms, including Dean Witter 

Reynolds; Paragon Futures; Rufenacht, Bromagen & Hertz; and Forex Capital 

Management. Catranis was registered as an associated person with AIM from 1987 to 

2015 when he was permanently barred by the National Futures Association, as discussed 

in more detail below. Catranis resided in Newport Beach, California until 2013 when he 

moved to the British Virgin Islands. As noted above, due to restrictions placed on his 

passport for non-payment of child-support, Catranis faces potential arrest and 

prosecution ifhe tries to re-enter the U.S. 

On February 16, 1995, the NFA issued a three count complaint against Catranis 

and his firm, alleging: one, that Catranis failed to observe high standards of commercial 

honor and just and equitable principles oftrade in the conduct of his commodity futures 

business by failing to give customers certain trades which were entered on their behalf 

and placed those trades in his firmts proprietary account; two, that Catranis failed to 

maintain originals or copies of order tickets prepared for certain customer orders; and 

three, that Catranis used deceptive and misleading promotional material. On December 

17, 1997, the NFA issued a consent order: one, that barred Catranis from serving on any 

disciplinary committee, arbitration panel, oversight panel or governing board of any 

self-regulatory organization; two, that ordered Catranis to pay restitution to 18 

customers totaling $33,050; and three, that fined Catranis $15,000. In re Catranis, et 

al. (NFA Case No. 95-BCC-3) (NFA records). At the time that they opened their 

accounts, this disciplinary information was available to Herbert and Ari Moskowitz at 

NFA's website. 

11 

On March 17, 2015, the NFA issued a complaint that charged, among other 

things, that Catranis, AIM, and AIM's predecessor firm, Primary Assets Management 

Corporation: one, used misleading and unbalance promotional material which included 

hypothetical performance results that were not accurately disclosed as such; two, failed 

to maintain records relating to the promotional material; and three, routinely traded 

customer accounts in a manner that generated "abusively high" commissions in 

contravention ofthe best financial interests ofthe customers. One ofthe abusive 

trading strategies involved allowing in-the-money options to expire and be assigned 

which generated additional commissions. The complaint also asserted, among other 

things, that in 2011, 49 ofAIM's 52 customers lost money. By consent order issued 

August 27, 2015, Catranis was ordered to withdraw from NFA membership, and ordered 

to not reapply for membership, or act as a principal of a NFA member, for four years. 

In re Primary Assets Management Corporation, Accredited Investment Management 

Corporation, and Peter G. Catranis (NFA Case No. 15-BCC-3) (NFA records). 

The account openings 

5. In September 2010 Herbert Moskowitz and Catranis first spoke. They 

discussed the Federal Reserve's quantitative easing, and the potential impact on the 

U.S. dollar, tangible assets and interest rates ifthe Fed ended quantitative easing. 

Catranis sent videos that featured Ron Paul and others expressing their views on the 

potential impact of and the timeline for the scheduled end ofthe second round of 

quantitative easing in June 2011. Over the next seven months Catranis sent Moskowitz 

various charts discussing market conditions and his trading strategy. Catranis and 

Moskowitz shared the beliefthat the Federal Funds rate, which was at a historic low, 

12 

was likely to increase. However, Moskowitz told Catranis that he wanted to wrap up 

selling his practice and moving to Florida before committing funds. 

By May 2011, Herbert Moskowitz decided to open an account to be traded by 

Catranis, based on Catranis' assurances that his trading system was successful, that his 

trading strategy would not generate substantial commissions, and that his trading 

strategy was long term with a two to five year horizon. On May 24, 2011, Herbert 

Moskowitz opened a PFG Best account online by wiring $100,000, and filling out PFG 

Best's Online Account Application. Moskowitz did not sign a Limited Power ofAttorney 

giving Catranis authority to manage his account. 

Moskowitz was less than completely forthcoming when he answered "No" to the 

following question in the PFG account application: 

"Have you ever been run:tt to an investigation. complaint. or settlement 

with the NFA, CFfC, SEC or other?" 

[Underlining added for emphasis.] In this connection, before the account was approved 

the PFG compliance department sent the following e-mail to the PFG new accounts 

department: 

Please see attached negative CDC report we have received for Herbert 

Moskowitz. The account application doesn't say anything about being 

party to an investigation. Should this be left up to the broker to continue 

the account opening process? 

First, the PFG new accounts department responded: 

Yes, its 10 years old. 

Then Catranis responded: 

He just wired 100K and I trust him, I'd rather have someone who had a 

ding than someone who was sue happy and caused a ding. The Guy is a 

family dentist. I don't think what he did would make a good movie. Hope 

you can get this open. 

13 

He told me about this, he and family members owned more than 5% of a 

company, and they determined he was ultimately in control of all shares. 

This guy is a Dentist, he didn,t file the correct paperwork with the SEC. He 

didn,t own the shares his son in law did, he had in writing that he only had 

authorization to sell the shares ifsomething happened to his son in law. 

On the record ofthis case, it cannot be determined the extent to which Catranis, 

perfunctory characterization of Moskowitz,s violations was based on a self-serving 

explanation by Moskowitz, or Catranis, indifference to the violations vis-a-vis 

Moskowitz,s $100,000 wire. 

6. On July 20, 2011, on the recommendation of Herbert Moskowitz, Ari 

Moskowitz opened a PFG account online and wired $ioo,ooo. Ari similarly did not 

sign any Power ofAttorney. Catranis made similar misrepresentations to convince Ari 

to open his account. 

Trading activity 

7. As noted above, Herbert and Ari each opened his account with a wired 

deposit of $100,000, Herbert on May 20, 20111, and Ari on July 24, 2011. 

Trading in Herbert,s account began in late May 2011, and trading in Ari,s account 

began in late July 2011. On July 10, 2012, when PFG filed for bankruptcy and the 

accounts were frozen, Herbert,s account had a liquidation value of $20,633,13 and Arfs 

account had a liquidation value of $30,523. 

Herbert checked the status of his account by logging on the PFG website. [See ~4 

Herbert Moskowitz affidavit dated January 7, 2016.] Ari received his PFG statements 

via e-mail. [See Ari Moskowitz affidavit dated January 13, 2016.] Their submissions 

13 In this decision, amounts are rounded to nearest dollar. 

14 

indicate that they were regularly monitoring activity in their accounts during the 

summer and early fall of 2011. 

8. For Herbert Moskowitz's account, in May, June and July, Catranis exclusively 

bought and sold December futures and options contracts. In August and September, he 

began buying and selling March and June contracts. Set out below is a summary of 

trading activity in Herbert's account: 

Liquidation Commissions 

Month Value &Fees 

May-11 $89,120 $6,286 

Jun-11 91,434 2,266 

Jul-11 78,952 3,519 

Aug-11 64,205 6,414 

Sep-11 70,323 10,502 

Oct-11 54,811 8,231 

Nov-11 46,808 1,848 

Dec-11 43,213 4,947 

Jan-12 20,605 1,407 

Feb-12 27,081 5,234 

Mar-12 26,448 1,445 

Apr-12 21,584 530 

May-12 22,164 1,180 

Jun-12 24,602 0 

As can be seen, by the end ofAugust, Herbert's account had been charged over $18,ooo 

in commissions, and the account was down over $35,000, and by the end of September, 

Herbert's account had been charged about $29,000 in commissions, and the account 

had rebounded slightly but was still down almost $30,000. 

9. For Ari Moskowitz's account, in July, Catranis exclusively bought and sold 

December futures and options contracts. In August and September, he began buying 

and selling March and June contracts. Set out below is a summary oftrading activity in 

Ari's account: 

15 

Month 

Liquidation 

Value 

Commissions

&Fees 

Jul-11 $93,106 $s,592 

Aug-11 77,023 7,697 

Sep-11 85,826 6,980 

Oct-11 72,158 7,262 

Nov-11 64,777 3,631 

Dec-11 60,168 6,746 

Jan-12 27,152 5,242 

Feb-12 36,971 6,161 

Mar-12 36,338 1,445 

Apr-12 31,474 530 

May-12 32,054 1,180 

Jun-12 34,492 0 

As can be seen, by the end ofAugust, Ari's account had been charged over $13,000 in 

commissions, and the account was down around $23,000, and by the end of September, 

Herbert's account had been charged over $20,000 in commissions, and the account had 

rebounded slightly but was still down around $14,000. 

10. Sometime in August or September, Herbert called Catranis to express concern 

about losses, about excessive commissions, and about the fact that his purchase and sale 

of nearby contracts was generating excessive commissions and appeared inconsistent 

with a long-term trading strategy. Catranis assured him that he would reduce trading 

frequency and resulting commissions. But as can be seen by the summary above, 

Catranis continued trading and generating substantial commissions for several more 

months. 

In mid-September, Ari told Catranis that he was alarmed by the excessive 

commissions and instructed him to cease trading. Catranis ceased trading for a couple 

ofweeks, but resumed trading on September 29, 2011. 

16 

Conclusions 

Herbert and Ari Moskowitz have established by a preponderance ofthe evidence 

that Peter G. Catranis recklessly misrepresented the relative risks and rewards, and 

commission costs, of his trading strategy in violation of Sections 4b(a)(1)(A) and 4c(b) 

ofthe Commodity Exchange Act, and CFrC rule 33.1o(a), and that Herbert and Ari 

Moskowitz relied on Catranis' misrepresentations. The proper measure of damages is 

their out-of-pocket losses. However, by the end ofSeptember 2011 their reliance on 

Catranis' fraud was no longer reasonable, because by that time they both possessed 

sufficient information to recognize a substantial deviation between his representations 

and his trading, they both had expressed concern about the mounting commissions, and 

Catranis had disregarded Ari's instruction to cease trading. Thus, complainants' 

damages will be limited to their losses at the end of September 2011. 

ORDER 

Peter G. Catranis misrepresented the relative risks and rewards, and commission 

costs, of his trading strategy in violation of Sections 4b(a)(1)(A) and 4c(b) ofthe 

Commodity Exchange Act, and CFrC rule 33.1o(a). Catranis' violations proximately 

caused Herbert Moskowitz $29,677 in damages, and proximately caused Ari Moskowitz 

$14,174 in damages. Accredited Investment Management Corporation is liable for 

Cartranis' violations pursuant to Section 2(a)(1)(B) ofthe Act. Accordingly, Peter G. 

Catranis and Accredited Investment Management Corporation are ordered: one, to pay 

to Herbert Moskowitz $29,677, plus pre-judgment and post-judgment interest on that 

amount at 0.52% from May 24, 2011 to the date of payment, plus $250 for the cost of 

the filing fee; and two, to pay to Ari Moskowitz $14,174, plus pre-judgment and post17 

judgment interest on that amount at 0.52% from ,July 20, 2011 to the date of payment, 

plus $250 for the cost ofthe filing fee. Liability shall be joint and several. 

Dated May 12, 2016. 

/)-//__y # ~ 

McGuire, 

J

Judgment Officer 

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