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UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF FLORIDA 

CASE NO. 16-60226-CIV-ZLOCH 

U.S. COMMODITY FUTURES TRADING 

COMMISSION, 

Plaintiff, 

vs. 

RICO OMAR COX a/k/a Omar Negron, 

Defendants. 

DEFAULT FINAL JUDGMENT 

THIS MATTER is before the Court upon Plaintiff's Motion For 

Final Judgment By Default, Permanent Injunction, Civil Monetary 

Penalties, And Other Statutory And Equitable Relief Against 

Defendant (DE 12). The Court has carefully reviewed said Motion, 

the entire court file and is otherwise fully advised in the 

premises. 

I. Introduction 

On February 4, 2016, Plaintiff United States Commodity Futures 

Trading Commission ( "CFTC" or "Commission") filed its Complaint (DE 

1) for injunctive and other equitable relief and penalties against 

Defendant Rico Omar Cox, a. k. a. Omar Negron ("Cox") , for violations 

of the Commodity Exchange Act ("Act") , 7 U.S. C. § § 1 fil seq. 

(2012) . Said Complaint alleged that beginning in at least August 

2010 through March 2015 (the "Relevant Period"), Cox fraudulently 

solicited his trading services for managed commodity futures 

accounts, and lost most of the at least $499,000 he traded for or 

on behalf of at least nine clients. When soliciting clients for 

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his Commodity Trading Advisor ("CTA") business, Cox created and 

distributed through means and instrumentalities of interstate 

commerce promotional materials to prospective clients that 

intentionally or recklessly contained materially false and 

misleading statements and/or failed to disclose material facts, 

including: (a) claiming that he has been a successful futures daytrader full time for years; (b) claiming to make thousands of 

dollars and/or returns of 10-40% daily trading futures; 

(c) providing trading account statements purporting to represent 

his historical futures trading activity that materially overstated 

Cox's rates of return; and (d) failing to disclose his felony fraud 

and theft convictions in Florida in April 2013. 

Additionally, the Complaint (DE 1) alleges that Cox created 

and distributed to clients fraudulent daily account statements 

and/or screen shots that materially overstated trading profits and 

account cash balances, when in reality Cox's trading of such 

customer accounts resulted in losses of virtually all their 

principal. Finally, during the Relevant Period, Cox also failed to 

register with the Commission as a CTA as required. 

The Complaint (DE 1) ultimately alleges that Defendant engaged 

in acts and practices in violation of certain core anti-fraud and 

registration provisions of the Act, namely, Sections 4b(a) (1) (A), 

(B) and (C), 4o(l) (A) and (B), and 4m(l) of the Act, 7 U.S.C. 

§§ 6b(a) (1) (A), (B) and (C), 6o(l) (A) and (B), and 6m(l). Said 

Complaint sought injunctive relief, disgorgement, restitution and 

civil monetary penalties. 

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Cox was properly served with the summons and Complaint 

pursuant to Fed. R. Ci v. P. ( 4) ( e) ( 2) , by personal service on 

Friday, February 5, 2016. Pursuant to Fed. R. Civ. P. 12(a) (1), 

Cox's Answer was, therefore, due on or before Friday, February 26, 

2016. Defendant has not otherwise answered, pled, or defended this 

action, nor has he sought an extension of time to respond to the 

Commission's Complaint within the time permitted by Fed. R. Civ. P. 

12(a) (1). Accordingly, on February 29, 2016, the CFTC filed its 

Request For Entry Of Default Against Defendant (DE 9) pursuant to 

Fed. R. Civ. P. SS(a), and the Clerk of this Court entered default 

against Defendant on February 29, 2016. See DE 10. The Court 

approved, adopted, and ratified the default entered by the Clerk of 

this Court and ordered the CFTC to file its Motion For Default 

Final Judgment by noon on March 16, 2016. See DE 11. 

The CFTC has now submitted its Motion for Final Judgment by 

Default, Permanent Injunction, Civil Monetary Penalties, and Other 

Statutory and Equitable Relief Against Defendant (DE 12) ("Motion") 

pursuant to Fed. R. Civ. P. SS(b) (2) and Local Rule 7(a) (1) (E), to 

move this Court to grant final judgment by default against 

Defendant, order permanent injunctive relief, impose trading and 

registrations bans, and impose a restitution obligation, 

disgorgement obligation, and a civil monetary penalty. 

The Court has carefully considered the Complaint (DE 1), the 

allegations of which are well-pled and hereby taken as true by 

virtue of Cox's default, the CFTC's Motion and the Declaration and 

Exhibits in support thereof (DE 12), and the record in this case. 

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The Court being otherwise fully advised in the premises finds as 

follows. 

I. Findings of Fact 

1. Plaintiff U.S. Commodity Futures Trading Commission is an 

independent federal regulatory agency that is charged by Congress 

with administering and enforcing the provisions of the Act, 

7 u.s.c. §§ 1-26 (2012), and the Regulations promulgated 

thereunder, 17 C.F.R. §§ 1.1 - 190.10 (2015). 

2. Defendant Rico Cox resides in Dania Beach, Florida. Cox 

has never been registered with the Commission in any capacity. At 

all relevant times, Cox has acted as a CTA by holding himself out 

to the general public as a CTA by offering commodity futures 

trading services in managed accounts. In April 2013, Cox was 

convicted of third degree felony fraud and acting as an unlicensed 

mortgage broker in Broward County, Florida and was sentenced to 5 

years' probation (See State of Florida v. Cox, Case No. 

12016762CF10A, Fla. Broward County Ct., April 18, 2013). Later the 

same month, Cox was separately convicted of: (a) a felony scheme 

to defraud and operating as a broker/sales associate without a 

license, and (b) felony grand theft and operating as a broker/sales 

associate without a license, in Palm Beach County, Florida, and was 

sentenced to 30 days' imprisonment and 5 years' probation (See 

State of Florida v. Cox, Case Nos. 2012CF005665AXXX, and 

2013CF001453AXXX, Fla. Palm Beach County Ct., April 30, 2013). 

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----~-------------------

3. Cox promoted himself to the public over the internet in 

Craigslist advertisements or other similar websites offering either 

managed account services trading futures, or trading education and 

training through a live trade room. Cox claimed that he was an 

experienced, successful full-time futures trader for years. Cox 

touted achieving superior trading returns in such advertisements 

as: (a) "I trade futures, mainly crude oil, and make thousands of 

dollars daily," or (b) "we average 10-40% return daily," or (c) "we 

average a return of what most people make investing i[n] months or 

years in [sic] day." 

4. None of the foregoing representations were true, and Cox 

knew that the representations were false or recklessly disregarded 

the truth while making these representations. Among other things, 

Cox did not achieve the purported actual prof its he represented to 

customers and potential customers that had been made, Cox was never 

a successful futures trader, and he is unable to substantiate any 

of .these touted returns. Additionally, when soliciting potential 

customers, Cox failed to disclose his 2013 felony fraud and theft 

convictions in Florida. 

5. Cox instructed prospective clients to open futures trading 

accounts at one of two futures commission merchants ("FCMs"). For 

the accounts that Cox did not obtain discretionary trading 

authority over, he instructed certain clients to answer "no" on 

account opening documents to a question of whether anyone other 

than the account owner would have authority to trade the futures 

account. Cox then obtained trading access to the client's account 

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by using the client's login ID and password in lieu of getting a 

power of attorney to exercise discretionary trading authority. 

6. Cox's trading the customer accounts in this fashion 

concealed his identity and involvement from the FCMs. In addition, 

it allowed him to assuage client concerns by telling clients he was 

only able to trade and could not take any money directly from their 

account. However, Cox had clients execute a trading agreement 

whereby the client agreed that Cox would be compensated by 

splitting any trading profits. At least one client sent Cox funds 

related to Cox's handling of his account. 

7. Cox created and sent certain clients false account 

statements showing large account balances and monthly profits in 

accounts he purportedly traded. For example, in one instance, he 

sent three monthly account statements for a non-existent account in 

the name of his alias, Omar Negron, to a prospective client. The 

statements showed monthly profits of approximately $33,500, 

$41,300, and $31,500 with corresponding ending monthly cash 

balances of approximately $658,700, $677,100, and $706,500. In 

this instance, the prospective client specifically relied on the 

false statements in deciding to open an account. 

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8. Cox's trading was in fact unsuccessful. In the aggregate, 

during the relevant time, at least nine clients deposited at least 

$499,000 into commodity futures trading accounts that Cox managed. 

Excluding client withdrawals of approximately $117,000 from their 

accounts, Cox lost no less than $381,000 - i.e., virtually all of 

the remaining funds - trading those accounts using his clients' 

login credentials. 

9. Once he started trading a client's account, Cox generally 

lost most of the available funds in a very short period of time. 

For example, in trading on behalf of one client's account funded 

with total deposits of $32,000, Cox lost money trading and traded 

the account down to a cash balance of less than $200.00 in under 

fourteen (14) days. In order to conceal his trading losses, Cox 

created false account statements and/or account screen shots 

(collectively, "screen shots") that he distributed to such client 

via email that falsely reported their accounts were profitable. 

These screen shots also reflected inf lated cash values and excess 

equity amounts. None of the screen shots accurately depicted an 

actual trading account traded by Cox, and Cox knew that his 

representations were false or recklessly disregarded the truth 

while making these representations. 

10. In 2011, in response to questions from CFTC staff 

concerning his CTA activities conducted without the benefit of 

registration with the CFTC, Cox contended that he had ceased 

advertising and trading on behalf of clients. To the contrary, Cox 

continued or resumed soliciting managed trading accounts via 

Craigslist or other means, including at least three accounts in 

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2013 and 2014, and lost most of the funds trading for or on behalf 

of those accounts as well. 

II. Conclusions of Law 

1. When a party against whom a default judgment is sought has 

failed to plead or otherwise assert a defense, and that fact has 

been documented, the clerk shall enter the party's default. Fed. 

R. Civ. P. 55(a). The party seeking the default shall then apply 

to the court for a default judgment. Fed. R. Civ. P. 55(b). Fed. 

R. Civ. P. 55(b) (2) provides that judgment by default may be 

entered by a district court against a defendant upon the failure of 

that defendant to plead or otherwise defend. CFTC v. FX 

Professional Intern. Solutions, Inc., 2010 WL 5541050 at *4 (S.D. 

Fla. Nov. 29, 2010); Dunn v. Prudential Ins. Co. of America, 2011 

WL 1298156 at *3-4 (M.D. Fla. April 4, 2011); Vaccaro v. Custom 

Sounds, Inc., 2009 U.S. Dist. LEXIS 113982 (M.D. Fla. Nov. 19, 

2009) . The grant or denial of a motion for default judgment lies 

within a district court's sound discretion. Hamm v. DeKalb County, 

774 F.2d 1567, 1576 (11th Cir. 1985). Where a party fails to 

respond, after notice, the court is justified in entering a 

judgment against the defaulting party. Natures Way Marine, LLC v. 

N. Am. Materials, Inc. 2008 WL 801702 (S.D. Ala. 2008), (citing 

Int'l Brands USA. Inc. v. Old St. Andrews Ltd., 349 F. Supp.2d 256, 

261 (D. Conn. 2004)). Further, if a district court determines that 

a defendant is in default, then well-pled factual allegations of 

the complaint, except those relating to unspecified damages, will 

be taken as true and liability is established by the entry of a 

default. Sampson v. Brewer, Michaels & Kane, LLC, 2010 WL 2432084 

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(M.D. Fla. May 26, 2010) (citing Buchanan v. Bowman, 820 F.2d 359, 

361 (11th Cir. 1987)); see also Fed. R. Civ. P. 8(b) (6) (effect of

failure to deny an allegation) . Moreover, "[i] t is a familiar

practice and an exercise of judicial power for a court upon

default, by taking evidence when necessary or by computation from

facts of record, to fix the amount which the plaintiff is lawfully

entitled to recover and to give judgment accordingly." Pope v. 

United States, 323 U.S. 1, 12 (1944). 

2 . The Clerk of the Court already has entered a default

against Defendant on February 29, 2016. See DE 9. 

3. This' Court hereby finds that the CFTC's allegations in the

Complaint (DE 1) against Defendant are well-pleaded and hereby

taken as true, that these allegations support finding of violations

of the Act and Regulations, and in accordance with Fed. R. Civ. P. 

SS(b) (2), a default judgment is hereby entered against Defendant. 

4. Section 6c(a) of the Act, 7 U.S.C. § 13a-1(a) (2012), 

authorizes the CFTC to seek injunctive relief in district court 

against any person whenever it shall appear that such person has 

engaged, is engaging, or is about to engage in any act or practice 

constituting a violation of any provision of the Act or any rule, 

regulation, or order thereunder. Venue properly lies with the 

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

(2012), in that Defendant transacted business in the Southern 

District of Florida and the acts and practices in violation of the 

Act occurred within this District, among other places. 

5. In, analyzing the CFTC's Motion, the Court keeps in mind a 

crucial purpose of the Act, "protecting the innocent individual 

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investor-who may know little about the intricacies and 

complexities of the commodities market-from being misled or 

deceived." CFTC v. R.J. Fitzgerald & co., 310 F.3d 1321, 1329 

(11th Cir. 2002), cert. denied, 543 U.S. 1034 (2004). "[C] aveat 

emptor has no place in the realm of federal commodities fraud. 

Congress, the CFTC, and the Judiciary have determined that 

customers must be zealously protected from deceptive statements by 

brokers who deal in these highly complex and inherently risky 

financial instruments." Id. at 1334. 

6. Sections 4b(a) (1) (A) and (C) of the Act, 7 u.s.c. § 

6b(a) (1) (A) and (C) (2012), make 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 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 on behalf of, or with, 

any other person: (A) to cheat or defraud or attempt to cheat or 

defraud another person; 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 contract for the other person. 

7. During the Relevant Period, Cox cheated, defrauded or 

deceived, and/or attempted to cheat, defraud or willfully deceive 

current and prospective Cox clients by, among other things, 

knowingly or recklessly omitting and/or making false 

representations of material fact to clients and prospective 

clients, such as the following: 

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(a) falsely claiming that he has been a successful futures 

day-trader full time for years; 

(b) falsely stating in promotional materials that Cox was 

an experienced, successful futures traders making 

thousands of dollars daily, and/or earning daily 

returns as high as 10 - 40% daily, when Cox was largely 

unsuccessful at futures trading; and 

(c) failing to disclose to clients and prospective clients 

his own felony fraud and theft criminal convictions in 

Florida in 2013. 

8. By this conduct, Cox has violated Sections 4b(a) (1) (A) and 

(C) of the Act, 7 u.s.c. § 6b(a) (1) (A) and (C) (2012). 

9. Section 4b(a) (1) (B) of the Act, 7 U.S.C. § 6b(a) (1) (B) 

(2012), 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 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 on behalf of, or with, any other person 

"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. 

10. Section 4b(a) (1) (B) of the Act, 7 u.s.c. § 6b(a) (1) (B) 

(2012), 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 in interstate commerce or for future delivery that is 

made, or to be made, on or subject to the rules of a designated 

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contract market, for on behalf of, or with, any other person 

"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." 

11: During the Relevant Period, Cox willfully made or caused 

to be made false reports or statements, and knowingly issued them 

to clients and prospective clients, such as the following: 

(a) providing some prospective clients with fraudulent 

trading account statements showing profitable trading 

activity of Cox, when in reality, such statements 

either: (1) were false account statements created in 

their entirety by Cox, or (2) contained results of 

simulated or hypothetical trading without being 

disclosed as such; and 

(b) leading at least some clients to believe that Cox 

was making profitable trades in their accounts by 

issuing false daily account statements and/or 

screenshots of profitable trading activity and 

overstated account balances that Cox created himself, 

when in reality Cox's trading in such client accounts 

caused losses of most of the principal. 

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12. By this conduct, Cox has violated Section 4b(a) (1) (B) of 

the Act, 7 u.s.c. § 6b(a) (1) (B) (2012). 

13. Section 4o(l) of the Act, 7 u.s.c. § 60(1)§§ (2012), in 

relevant part, makes it unlawful for CTAs, Commodity Pool 

Operators ( "CPOs") , and their associated persons, by use of the 

mails or any means or instrumentality of interstate commerce, 

directly or indirectly, (A) to employ any device, scheme, or 

artifice to defraud any participant; or (B) to engage in any 

transaction, practice, or course of business that operates as a 

fraud or deceit upon any participant. Section 4o(l) of the Act 

applies to all CTAs, CPOs, and their associated persons, whether 

registered, required to be registered, or exempted from 

registration. CFTC v. Skorupskas, 605 F. Supp. 923, 932 (E.D. 

Mich. 1985); 17 C.F.R. § 4.15 (2015). 

14. During the Relevant Period, Cox acted as a CTA by engaging 

in the business of advising others as to the value or the 

advisability of trading in any forex, commodity futures and/or 

options contract for compensation and profit, and by trading 

commodity futures on his customers' behalf. 

15. Cox, while acting as a CTA, used the mails or any means or 

instrumentality of interstate commerce to employ a device, scheme 

or artifice to defraud its participants, and engaged in a 

transaction, practice or course of business which operated as a 

fraud upon its participants, by, among other things: 

(a) falsely stating in promotional materials that Cox 

was an experienced, successful futures traders making 

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thousands of dollars daily, and/or earning daily 

returns as high as 10 - 40% daily, when Cox was largely 

unsuccessful at futures trading; 

(b) providing some prospective clients with fraudulent 

trading account statements showing profitable trading 

activity of Cox, when in reality, such statements 

either: (1) were false account statements created in 

their entirety by Cox, or (2) contained results of 

simulated or hypothetical trading without being 

disclosed as such; 

(c) leading at least some clients to believe that Cox 

was making profitable trades in their accounts by 

issuing false daily account statements and/or 

screenshots of profitable trading activity and 

overstated account balances that Cox created himself, 

when in reality Cox's trading in such client accounts 

experienced massive, catastrophic losses; and 

(d) failing to disclose to clients and prospective 

clients his own felony fraud and theft criminal 

convictions in Florida in 2013. 

16. By this conduct, Cox has violated Section 4o(l) (A), (B) of 

the Act, 7 U.S.C. § 6o(l) §§(A), {B) (2012). 

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17. A "commodity trading advisor" or "CTA" is defined in 

Section 1a(12) of the Act, 7 U.S.C. § 1a(12) (2012), and in 

Regulation 1.3 (bb) (1), 17 C.F.R. § 1.3 (bb) (1) (2015), in relevant 

part, as any person who, "for compensation or profit, engages in 

the business of advising others . . as to the value or the 

advisability of trading" in any foreign currency ("forex"), 

commodity futures and/or options contract. 

18. Subject to certain exemptions and exclusions not 

applicable in this case, all CTAs must be registered with the CFTC 

pursuant to Section 4m(1) of the Act, 7 u.s.c. § 6m(1) (2012). 

19. During the Relevant Period, Cox acted as a CTA within the 

meaning of Section 1a(12) of the Act, 7 U.S.C. § 1a(12) (2012), and 

Regulation 1.3(bb) (1), 17 C.F.R. §§ 1.3(bb) (1) (2015), in that for 

compensation or profit he engaged in the business of advising 

others as to the value or the advisability of trading in commodity 

futures without the benefit of registration with the CFTC. 

20. By this conduct, Cox has violated Section 4m(1) of the 

Act, 7 U.S.C. § 6m(1) (2012), in that he acted as a CTA without the 

benefit of registration with the Commission as a CTA. 

21. Section 6c of the Act, 7 U.S.C. § 13a-1 (2012), authorizes 

and directs the CFTC to enforce the Act and Regulations and allows 

a district court, upon a proper showing, to grant a permanent 

injunction. CFTC v. Wilshire Inv. Mgmt. Carp., 531F.3d1339, 1346 

(11th Cir. 2008). In an action for permanent injunctive relief, 

the CFTC is not required to make a specific showing of irreparable 

injury or inadequacy of other remedies, which private litigants 

must make. CFTC v. Muller, 570 F.2d 1296, 1300 (5th Cir. 1978); 

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United·States v. Ouadro Corp., 928 F. Supp. 688, 697 (E.D. Tex. 

1996) (citations omitted), aff'd, U.S. v. Ouadro Corp., 127 F.3d 34 

(5th Cir. 1997); CFTC v. British Am. Commodity Options Corp., 560 

F.2d 135, 141-42 (2d Cir. 1977), cert. denied 438 U.S. 905 (1978). 

Rather, the CFTC makes the requisite showing for issuance of 

injunctive relief when it presents a prima facie case th~t the 

defendant has engaged, or is engaging, in illegal conduct, and that 

there is a likelihood of future violations. CFTC v. American Bd. of 

Trade, Inc., 803 F.2d 1242, 1250-51 (2d Cir. 1986) i CFTC v. Hunt, 

591 F.2d 1211, 1220 (7th Cir. 1979), cert. denied, 442 U.S. 921 

(1979). 

22. In a CFTC enforcement case, the 11th Circuit held that the 

district court's finding of a likelihood of future violations 

supported its entry of a permanent injunction. See CFTC v. Sidoti, 

178 F.3d 1132 (11th Cir. 1999). In Sidoti, the 11th Circuit 

stated: "In light of the likelihood of future violations, the 

district court did not abuse its discretion in enjoining further 

violations of the Act." 178 F.3d at 1137; see also SEC v. Carriba 

Air. Inc., 681 F.2d 1318, 1322 (11th Cir.1982); SEC v. Blatt, 583 

F.2d 1325, 1334 (5th Cir. 1978). Whether such a likelihood of 

future violations exists depends on the "totality of the 

circumstances." SEC v. Mgmt. Dynamics, Inc., 515 F.2d 801, 807 (2d 

Cir. 1975); CFTC v. Morgan. Harris & Scott, Ltd., 484 F. Supp. 669, 

676 (S.D.N.Y. 1979). Foremost among these circumstances is the 

past illegal conduct of the defendant, from which courts may infer 

a likelihood of future violations. British Am. Commodity Options 

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Corp., 560 F.2d at 142; Mgmt. Dynamics, Ltd., 515 F.2d at 807; 

Carriba Air, 681 F.2d at 1322. 

23. The scope of the injunctive relief can be tailored to meet 

the circumstances of the violations shown. For example, upon the 

CFTC' s showing of a violation, courts have entered permanent 

injunctions against future violations of the Act. See, e.g., CFTC 

v. U.S. Metals Depository Co., 468 F. Supp. 1149 (S.D.N.Y. 1979). 

Other courts have issued broader injunctions prohibiting trading 

activity, in addition to enjoining defendants from future 

violations. See, e.g., Wilshire Inv. Mgmt. Corp., 531 F.3d at 1346 

(upholding the district court's permanent injunction prohibiting 

the defendants from "engaging in any commodity-related activity"); 

see also CFTC v. Noble Wealth Data Info. Servs., 90 F. Supp. 2d 

676, 692 (D. Md. 2000) (" [t]he pervasiveness and seriousness of 

[the defendant's] violation justify the issuance of a permanent 

injunction prohibiting him from violating the Act and from engaging 

in any commodity-related activity, including soliciting customers 

and funds"), aff'd sub nom. CFTC v. Baragosh, 278 F.3d 319 (4th 

Cir. 2002); CFTC v. Rosenberg, 85 F. Supp. 2d 424, 454-55 (D.N.J. 

2000) (permanently enjoining defendant from trading commodities on 

behalf of others) . Under these standards, permanent injunctive 

relief, including a comprehensive trading ban, is clearly warranted 

against Defendant. 

24. Unless restrained and enjoined by this Court, there is a 

reasonable likelihood that the Defendant will continue to engage in 

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the acts and practices alleged in the Complaint, and in similar 

acts and practices in violation of the Act and Regulations. 

25. Further, the unqualified grant of statutory authority to 

issue an injunction under the Act carries with it the full range of 

equitable remedies, among which is the power to grant restitution. 

CFTC v. Wilshire Inv. Mgmt. Corp., 531 F.3d 1339, 1344 (11th Cir. 

2008); see also CFTC v. American Metals Exch. Corp., 991 F.2d 71, 

76 (3d Cir. 1993) ("A number of courts have held that district 

courts have the power to order disgorgement as a remedy for 

violations of the Act for 'the purpose of depriving the wrongdoer 

of his ill-gotten gains and deterring violations of the law'") . In 

addition, Section 6c(d) (1) of the Act, 7 U.S.C. § 13a-1(d) (1) 

(2012), authorizes the imposition of civil monetary penalties. The 

CFTC seeks both forms of monetary relief in this case. 

26. Under Section 6c of the Act, 7 u.s.c. § 13a-1 (2012), this 

Court is authorized to order restitution. Section 6c (d) (3), 7 

u.s.c. § 13a-1(d} (3) (2012), allows the CFTC to request and seek 

equitable remedies "on any person found in the action to have 

committed any violation," including: 

"(A) restitution to persons who have 

sustained losses proximately caused by such 

violation (in the amount of such losses); and 

(B) disgorgement of gains received in 

connection with such violation." 

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7 U.S.C. § 13a-l(d) (3); see also CFTC v. Hunter Wise Commodities, 

LLC, 21 F. Supp. 3d 1317, 1352-53 (S.D. Fla. 2014) (recognizing 

that the measure of restitution is equal to all customer losses as 

the appropriate remedy in a CFTC enforcement action for fraud) . 

27. Accordingly, the restitution award in this case is 

calculated with straightforward arithmetic, i.e. the amount of 

client funds taken in ($499,000), less client withdrawals 

($117,000); in this instance, $381,000, plus post-judgment 

interest. Such restitution award equals the amount the Defendant 

lost haphazardly trading futures contracts for his clients. 

28. Similarly, the disgorgement figure in this case is 

determined to be an amount equivalent to Defendant's "performance 

fees" received representing 50% of certain fictitious trading 

profits, as a result of acts or practices constituting violations 

of the Act; in this instance, $5,800, plus post-judgment interest. 

29. Lastly, Section 6c(d) (1) of the Act, 7 U.S.C. § 13al(d) (1) (2012), provides that "the [CFTC] may seek and the court 

shall have jurisdiction to impose, on a proper showing, on any 

person found in the action to have committed any violation [of the 

Act or Regulations] a civil penalty." Pursuant to Section 

6c (d) (1) (A) of the Act, 7 u.s.c. § 13a-l (d) (1) (A) (2012), and 

Regulation 143.8(a) (1), 17 C.F.R. § 143.8(a) (1) (2015), for the 

time period at issue in the case at bar, the civil monetary penalty 

shall be not more than the greater of $140,000 for each violation 

of the Act, or triple the monetary gain to Defendant. 

30. The CFTC has set forth several factors to consider in 

assessing a civil monetary penalty. These factors include: the 

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relationship of the violation at issue to the regulatory purposes 

of the Act and whether or not the violations involved core 

provisions of the Act; whether or not scienter was involved; the 

consequences flowing from the violative conduct; financial benefits 

to a defendant; and harm to customers or the market. Noble Wealth, 

90 F. Supp. 2d at 694; In re Grossfeld, [1996-1998 Transfer Binder] 

Comm. Fut. L. Rep. (CCH) ~ 26,921 at 44,467-8 (CFTC Dec. 10, 1996), 

aff'd, 137 F.3d 1300 (11th Cir. 1998)~. Civil monetary penalties 

should "ref le ct the abstract or general seriousness of each 

violation and should be sufficiently high to deter future 

violations," which means that civil monetary penalties should make 

it financially detrimental to a defendant to fail to comply with 

the Act and Regulations so that the defendant would rather comply 

than risk violations. Grossfield, ~ 26,921 at 44,467-8. As the 

Commission has stated: 

[Civil monetary] penalties signify the 

importance of particular provisions of the Act and 

the [CFTC] 's rules, and act to vindicate these 

provisions in individual cases, particularly where 

the respondent has committed the violations 

intentionally. Civil monetary penalties are also 

exemplary; they remind both the recipient of the 

penalty and other persons subject to the Act that 

noncompliance carries a cost. To effect this 

exemplary purpose, that cost must not be too low or 

potential violators may be encouraged to engage in 

illegal conduct. 

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In re GNP Commodities, Inc. [1990-92 Transfer Binder] Com. 

Fut. L. Rep. (CCH) ~ 25,360 at 39,222 (CFTC Aug. 11, 1992), aff'd 

sub nom. Monieson v. CFTC, 996 F.2d 852 (7th Cir. 1993); see also 

Reddy v. CFTC, 191 F.3d.109, 123 (2d Cir. 1999) (civil monetary 

penalties serve to further the Act's remedial policies and to deter 

others from committing similar violations) . 

31. This case warrants the imposition of a substantial civil 

monetary penalty against Defendant because he knowingly engaged in 

fraud, which is a core violation of the Act. See Grossfeld, ~ 

26,921 at 44,467 and n. 28 (citation omitted); see also CFTC v. 

United Investors Group, Inc., 440 F. Supp. 2d 1345, 1361 (S.D. Fla. 

2008) (determining that, among other things, "the gravity of the 

offenses, the brazen and intentional nature of the violations, 

[and] the vulnerability of the victims" justified "imposition of a 

substantial and meaningful [civil monetary] penalty"). 

Specifically, Defendant knowingly engaged in an illegal scheme by, 

inter alia, (i) fraudulently soliciting hundreds of thousands of 

dollars from customers for his commodity futures trading services, 

(ii) distributing fraudulent daily account statements or screen 

shots to clients that materially overstated trading profits and 

account cash balances, and (iii) failing to register with the 

Commission as a CTA as required. 

32. A civil monetary penalty in the total amount of $560,000 

against the Defendant is justified in this case. This amount 

represents a $140,000 civil monetary penalty for each of the four 

(4) counts as charged against him in the Complaint. The amount of 

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the civil monetary penalty is appropriate given the repeated and 

egregious nature of Defendant's fraudulent scheme. See United 

Investors Group, 440 F. Supp.2d at 1361; see also CFTC v. Leyy, 541 

F.3d 1102 (11th Cir. 2008) (holding that the Commodity Exchange Act 

provides for multiple civil monetary penalties for multiple 

violations even when those multiple violations are set forth in a 

single count) . 

Accordingly, after due consideration, it is 

ORDERED AND ADJUDGED as follows: 

1. Plaintiff's Motion For Final Judgment By Default, Permanent 

Injunction, Civil Monetary Penalties, And Other Statutory And 

Equitable Relief Against Defendant (DE 12) be and the same is 

hereby GRANTED as follows: 

a. Defendant and any of his agents, servants, employees, 

assigns, attorneys, and persons in active concert or participation 

with him, is/are permanently restrained, enjoined, and prohibited 

from directly or indirectly: 

i) cheating, defrauding or deceiving, and/or attempting to 

cheat, defraud or willfully deceive current and 

prospective Cox clients by, among other things, knowingly 

or recklessly - omitting and/or making false 

representations of material fact to clients and 

prospective clients engaging in conduct in violation of 

Sections 4b(a) (1) (A) and (C) of the Act, 7 u.s.c. 

§ § 6 b (a) ( 1 ) (A) and ( C) ( 2 O 12 ) ; 

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Case 0:16-cv-60226-WJZ Document 13 Entered on FLSD Docket 06/01/2016 Page 23 of 3

ii) willfully making or causing to be made false reports or 

statements, and knowingly issuing them to clients and 

prospective clients in violation of Section 4b(a) (1) (B) 

of the Act, 7 U.S.C. § 6b(a) (1) (B) (2012); 

iii) using the mails or any means or instrumentality of 

interstate commerce to employ a device, scheme or 

artifice to defraud his participants, and engaging in a 

transaction, practice or course of business which 

operates as a fraud upon his participants in violation of 

Sections 4o(1)1A) and (B) of the Act, 7 u.s.c. 

§§ 6o(l) (A) and (B) (2012); and/or 

iv) acting as a CTA without the benefit of registration with 

the Commission as a CTA in violation of Section 4m(l) of 

the Act, 7 U.S.C. § 6m(l) (2012). 

b. Defendant and any of his agents, servants, employees, 

assigns, attorneys, and persons in active concert or participation 

with him, is/are also permanently restrained, enjoined, and 

prohibited from directly or indirectly: 

i) trading on or subject to the rules of any registered 

entity (as that term is defined in Section la(40) of the 

Act , 7 u . s . C . § 1 a ( 4 O ) ( 2 O 12 ) ) ; 

ii) entering into any transactions involving "commodity 

interests" (as that term is defined in Regulation 1.3(yy), 

17 c. F. R. § 1. 3 (yy) (2015)) for Defendant's own personal 

accounts or for any accounts in which Defendant has a direct 

or indirect interest; 

23 

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Case 0:16-cv-60226-WJZ Document 13 Entered on FLSD Docket 06/01/2016 Page 24 of 31 

iii) having any commodity interests traded on Defendant's behalf; 

iv) 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; 

v) soliciting, receiving, or accepting any funds from any 

person for the purpose of purchasing or selling any 

commodity interests; 

vi) applying for registration or claiming exemption from 

registration with the Commission in any capacity, and 

engaging in any activity requiring such registration or 

exemption from registration with the Commission, except 

as provided for in Regulation 4.14(a) (9), 17 C.F.R. § 

4 .14 (a) (9) (2015); and/or 

vii) acting as a principal (as that term is defined in 

Regulation 3.l(a), 17 C.F.R. § 3.l(a) (2015)), agent, or 

any other officer or employee of any person (as that term 

is defined in Section la(38) of the Act, 7 U.S.C. § 

la(38) (2012) registered, required to be registered, or 

exempted from registration with the Commission, except as 

provided for in Regulation 4.14(a) (9), 17 C.F.R. 

§ 4.14(a)(9) (2015). 

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Case 0:16-cv-60226-WJZ Document 13 Entered on FLSD Docket 06/01/2016 Page 25 of 31 

c. Defendant shall pay res ti tut ion in the amount of three 

hundred eighty-one thousand dollars ($381,000) ("Restitution 

Obligation"), plus post-judgment interest. Post-judgment interest 

on the Defendant's Restitution Obligation shall accrue beginning on 

the date of entry of this Order and shall be determined by using 

the Treasury Bill rate prevailing on the date of entry of this 

Order pursuant to 28 u.s.c. § 1961 (2012). 

To effect payment of the Restitution Obligation and the 

distribution of any restitution payments to Defendant's clients, 

the Court appoints the National Futures Association ( "NFA") as 

Monitor ("Monitor"). The Monitor shall collect restitution 

payments from Defendant and make distributions as set forth below. 

Because the Monitor is acting as an officer of this Court in 

performing these services, the NFA shall not be liable for any 

action or inaction arising from NFA's appointment as Monitor, other 

than actions involving fraud. 

Defendant shall make Restitution Obligation payments under 

this Order to the Monitor in the name of "Cox - Restitution Fund" 

and shall send such Restitution Obligation payments by electronic 

funds transfer, or by U.S. postal money order, certified check, 

bank cashier's, or bank money order, to the Office of 

Administration, National Futures Association, 300 South Riverside 

Plaza, Suite 1800, Chicago, Illinois 60606, under a cover letter 

that identifies the paying Defendant and the name and docket number 

of this proceeding. Defendant shall simultaneously transmit copies 

of the cover letter and the form of payment to the Chief Financial 

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Case 0:16-cv-60226-WJZ Document 13 Entered on FLSD Docket 06/01/2016 Page 26 of 31 

Officer, Commodity Futures Trading Commission, Three Lafayette 

Centre, 1155 21st Street, NW, Washington, D.C. 20581. 

The Monitor shall oversee the Restitution Obligation and shall 

have the discretion to determine the manner of distribution of such 

funds in an equitable fashion to Defendant's clients identified by 

the Commission or may def er distribution until such time as the 

Monitor deems appropriate. In the event that the amount of 

Restitution Obligation payments to the Monitor are of a de minimis 

nature such that the Monitor determines that the administrative 

cost of making a distribution to eligible clients is impractical, 

the Monitor may, in its discretion, treat such restitution payments 

as civil monetary penalty payments, which the Monitor shall forward 

to the Commission following the instructions for civil monetary 

penalty payments set forth in Part III.B.2 below. 

Defendant shall cooperate with the Monitor as appropriate to 

provide such information as the Monitor deems necessary and 

appropriate to identify Defendant's clients to whom the Monitor, in 

its sole discretion, may determine to include in any plan for 

distribution of any Restitution Obligation payments. Defendant 

shall execute any documents necessary to release funds that he has 

in any repository, bank, investment or other financial institution, 

wherever located, in order to make partial or total payment toward 

the Restitution Obligation. 

The Monitor shall provide the Commission at the beginning of 

each calendar year with a report detailing the disbursement of 

funds to Defendant's clients during the previous year. The Monitor 

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Case 0:16-cv-60226-WJZ Document 13 Entered on FLSD Docket 06/01/2016 Page 27 of 31 

shall transmit this report under a cover letter that identifies the 

name and docket number of this proceeding to the Chief Financial 

Officer, Commodity Futures Trading Commission, Three Lafayette 

Centre, 1155 21st Street, NW, Washington, D.C. 20581. 

The amounts payable to each client shall not limit the ability 

of any client from proving that a greater amount is owed from 

Defendant or any other person or entity, and nothing herein shall 

be construed in any way to limit or abridge the rights of any 

client that exist under state or common law. 

Pursuant to Rule 71 of the Federal Rules of Civil Procedure, 

each client of the Defendant who suffered a loss is explicitly made 

an intended third-party beneficiary of this Order and may seek to 

enforce obedience of this Order to obtain satisfaction of any 

portion of the restitution that has not been paid by the Defendant 

to ensure continued compliance with any provision of this Order and 

to hold the Defendant in contempt for any violations of any 

provision of this Order. 

To the extent that any funds accrue to the U.S. Treasury for 

satisfaction of Defendant's Restitution Obligation, such funds 

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Case 0:16-cv-60226-WJZ Document 13 Entered on FLSD Docket 06/01/2016 Page 28 of 31 

shall be transferred to the Monitor for disbursement in accordance 

with the procedures set forth above. 

d. Defendant shall pay, disgorgement in the amount of five 

thousand eight hundred dollars ($5,800.00) ("Disgorgement 

Obligation"), plus post-judgment interest. Post-judgment interest 

on the Defendant's Disgorgement Obligation shall accrue beginning 

on the date of entry of this Order and shall be determined by using 

the Treasury Bill rate prevailing on the date of entry of this 

Order pursuant to 28 U.S.C. § 1961 (2012). 

Defendant shall pay his Disgorgement Obligation by electronic 

funds transfer, U.S. postal money order, certified check, bank 

cashier's check, or bank money order. If payment is to be made 

other than by electronic funds transfer, the payment shall be made 

payable to the Commodity Futures Trading Commission and sent to the 

address below: 

Commodity Futures Trading Commission 

Division of Enforcement 

ATTN: Accounts Receivables 

DOT/FAA/MMAC/AMZ-341 

CFTC/CPSC/SEC 

6500 S. MacArthur Blvd. 

Oklahoma City, OK 73169 

Telephone: (405) ~54-7262 

nikki.gibson@faa.gov 

If payment by electronic funds transfer is chosen, Defendant 

shall contact Nikki Gibson or her successor at the above address to 

receive payment instructions and shall fully comply with those 

instructions. Defendant shall accompany payment of the 

Disgorgement Obligation with a cover letter that identifies the 

paying Defendant and the name and docket number of the proceedings. 

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The Defendant shall simultaneously transmit copies of the cover 

letter and the form of payment to the Chief Financial Officer, 

Commodity Futures Trading Commission, Three Lafayette Centre, 1155 

21st Street, NW, Washington, D.C. 20581. 

e. Defendant shall pay, jointly and severally, a civil 

monetary penalty in the amount of five hundred sixty thousand 

dollars ( $560, ooo) ( "CMP Obligation") , plus post-judgment interest. 

Post-judgment interest on this CMP Obligation shall accrue 

beginning on the date of entry of this Order and shall be 

calculated using the Treasury Bill rate prevailing on the date of 

this Order pursuant to 28 U.S.C. § 1961 (2012). 

Defendant shall pay his CMP Obligation by electronic funds 

transfer, or by U.S. Postal money order, certified check, bank 

cashier's check, or bank money order. If payment is to be made 

other than by electronic funds transfer, the payment shall be made 

payable to the Commodity Futures Trading Commission and sent to the 

address below: 

Commodity Futures Trading Commission 

Division of Enforcement 

ATTN: Accounts Receivables 

DOT/FAA/MMAC/AMZ-341 

CFTC/CPSC/SEC 

6500 s. MacArthur Blvd. 

Oklahoma City, OK 73169 

Telephone: (405) 954-7262 

nikki.gibson@faa.gov 

If payment by electronic funds transfer is chosen, Defendant 

shall contact Nikki Gibson or her successor at the above address to 

receive payment instructions and shall fully comply with those 

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Case 0:16-cv-60226-WJZ Document 13 Entered on FLSD Docket 06/01/2016 Page 30 of 31 

instructions. Defendant shall accompany payment of the penalty 

with a cover letter that identifies the paying Defendant and the 

name and docket number of the proceedings. The Defendant shall 

simultaneously transmit copies of the cover letter and the form of 

payment to the Chief Financial Officer, Commodity Futures Trading 

Commission, Three Lafayette Centre, 1155 21st Street, NW, 

Washington, D.C. 20581. 

f. Partial Satisfaction: Acceptance by the Commission or the 

Monitor of any partial payment of Defendant's Restitution 

Obligation, Disgorgement Obligation, or CMP Obligation shall not be 

deemed a waiver of his obligation to make further payments pursuant 

to this Order, or a waiver of the Commission's right to seek to 

compel payment of any remaining balance. 

g. All notices required to be given by any provision in this 

Order shall be sent certified mail, return receipt requested, as 

follows: 

Notice to Commission: 

Rosemary Hollinger 

Deputy Director, Division of Enforcement 

U.S. Commodity Futures Trading Commission 

525 West Monroe Street, Suite 1100 

Chicago, Illinois 60661 

Notice to NFA: 

Executive Vice President, Compliance 

National Futures Association 

300 s. Riverside Plaza, Suite 1800 

Chicago, IL 60606-3447 

All such notices to the Commission or the NFA shall reference 

the name and docket number of this action. Until such time as 

Defendant satisfies in full his Restitution Obligation, 

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Case 0:16-cv-60226-WJZ Document 13 Entered on FLSD Docket 06/01/2016 Page 31 of 31 

Disgorgement Obligation, and CMP Obligation as set forth in this 

Order, Defendant shall provide written notice to the Commission by 

certified mail of any change to their telephone number and mailing 

address within ten (10) calendar days of the change. 

2. The Court will retain jurisdiction for purposes of 

enforcing this Default Final Judgment; and 

3. To he extent not otherwise disposed of herein, all pending 

Motions be and the same are hereby DENIED as moot. 

DONE AND ORDERED in ~mbers at Fort Lauderdale, Broward 

County, Florida, this ~~ day of May, 2016. 

WILLIAM J. ZLOCH 

United States District Judge 

Copies furnished: 

All Counsel of Record 

31