Release:#3892-96

For Release:February 26, 1996

**COLORADO COURT ISSUES EX PARTE ASSET FREEZE ORDER IN CFTC    ANTI- FRAUD ACTION AGAINST PRISM FINANCIAL AND BRIAN PRENDERGAST, BOTH OF    COLORADO, AND TWO OTHER DEFENDANTS IN CALIFORNIA**

**Order Stems from a CFTC Civil Action Charging the Defendants with    Cheating and Defrauding Commodity Pool Customers, and Misappropriating    Customer Funds**

WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced    today that the Honorable Wiley Daniel of the U.S. District Court for the    District of Colorado in Denver entered an ***ex parte*** asset    freeze order against **Prism Financial Corporation**, a registered    commodity pool operator and commodity trading advisory; **Brian    Prendergast**, president and a principal of Prism, both of Englewood,    Colorado; **Joel DeAngelis**, a principal of Prism who resides in Los    Gatos, California; and **Amerinational Financial**, a Prism sales agent    in Beverly Hills, California. Neither DeAngelis nor Amerinational Financial    is registered with the CFTC in any capacity. In addition to freezing the    defendants' assets, the court order also prohibits the defendants from    destroying books and records and from denying CFTC representatives access    to such records.

The court's action stems from a six-count civil injunctive complaint,    filed on February 20, 1996, charging, among other things, that the    defendants violated the anti-fraud provisions of the *Commodity Exchange    Act* and CFTC regulations.

**The Defendants Collected at Least $1,000,000 from at least 34    Customers**

The defendants allegedly committed fraud by, among other things,    cheating and defrauding at least 34 customers and potential customers by    making false, deceptive, or misleading representations in soliciting    investors to invest in the **Prism Limited Liability Company (Prism    LLC)** commodity pool created by Prism. The complaint charges that the    defendants omitted material facts concerning the likelihood of profit and    the risk of loss -- including falsely guaranteeing that customers would not    lose their principal associated with investments in the pool. In addition,    the complaint alleges that the defendants misrepresented the pool's trading    activities by deceiving customers as to the status of their accounts    through use of false account statements and that they misappropriated funds    by using them for personal and unrelated business expenses.

Specifically, during the period from at least January 1994 through at    least August 1995, the complaint alleges that the defendants fraudulently    solicited and Prism received approximately $1,000,000 for investment in **Prism LLC**. The defendants allegedly told customers that by investing in    **Prism LLC** their funds would be deposited into two accounts: 60    percent into an S&P 500 futures trading program and the remainder    in mutual funds to protect against unlikely losses in the trading program.    The defendants never used the trading program, the complaint alleges, and    deposited less than $4,000 of customer funds into a money market fund. By    the end of August 1994, it is alleged that $448,500 received from pool    participants had been deposited into Prism LLC, and all but $30,849 of    those funds had been lost.

In addition, the CFTC complaint charges that the defendants violated    numerous disclosure, reporting, and recordkeeping requirements of federal    commodity law and CFTC regulations.

**CFTC Seeks Permanent Injunctions and Civil Monetary Fines,**

**Among other Sanctions, Against the Defendants**

In its continuing litigation against the defendants, the CFTC is seeking    preliminary and permanent civil injunctions, in addition to other remedial    relief, including an accounting, disgorgement, rescission, and restitution.    The complaint also is seeking a civil monetary penalty against each    defendant of $100,000, or triple the monetary gains to the defendant,    whichever is greater, for each violation of the CEA.

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