Release: #3914-96 (Civ. H-96-1213)

For Release: June 5, 1996

TEXAS COURT ISSUES PRELIMINARY INJUNCTIONS AGAINST

CHRISTOPHER C. SCHAFER, A.R.S. FINANCIAL SERVICES, PETER J. URBANI,
    AND ALCHEMY FINANCIAL GROUP, ALL CHARGED IN CFTC ENFORCEMENT ACTION

Injunctions Continue and Expand the Court's Earlier
    Ex Parte Asset Freeze Order

WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced
    that the Honorable Ewing Werlein, Jr., U.S. District Judge for the Southern
    District of Texas in Houston, entered orders of preliminary injunction
    against Christopher C. Schafer and A.R.S. Financial Services,
    both of Alpharetta, Georgia, Alchemy Financial Group, Inc., a Texas
    corporation, and Peter J. Urbani of Cypress, Texas.

The court's action stems from a CFTC complaint filed on April 17, 1996,
    charging that the defendants engaged in violations of the Commodity
    Exchange Act and CFTC regulations, including providing false statements
    to commodity pool investors and commingling funds, among other alleged
    violations.

The court's preliminary injunctions prohibit the defendants from
    violating the Commodity Exchange Act and CFTC regulations, as
    charged, and require each defendant to make an accounting of their assets.
    The orders also continue the provisions of the court's April 17, 1996
    statutory ex parte restraining order, which froze the
    defendants' assets, prohibited the destruction of defendants' books and
    records, and granted the CFTC access to such books and records.

The complaint alleges that Urbani is the president of Alchemy, a
    commodity pool operator (CPO) for Genesis Limited Partnership, a commodity
    pool organized in Texas. Alchemy received and disbursed funds, and issued
    statements to Genesis' customers. Schafer is a shareholder of Alchemy, sole
    proprietor of A.R.S. Financial, and a CPO and commodity trading advisor for
    Genesis. None of the defendants has ever been registered with the CFTC in
    any capacity. Genesis is allegedly comprised of 15 limited partners who
    made capital contributions totalling approximately $107,000.

Specifically, the CFTC complaint charges Schafer with defrauding
    investors in his capacity as a CPO and trading advisor for Genesis by
    making false oral and written statements about the commodity futures
    transactions completed for Genesis and the profitability of futures
    investments for the pool. Schafer allegedly caused Urbani and Alchemy, also
    acting as commodity pool operators for Genesis, to provide the false
    reports and statements to investors.

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Among the false statements that the defendants allegedly made to
    investors was a statement to the effect that pool assets totalled $162,000,
    including profits of $74,000, when, at the time the statement was made, the
    futures trading had resulted in almost total losses for the pool.

In addition, the defendants are charged with failing to comply with CFTC
    regulatory requirements related to their commodity pool and futures trading
    activities, including:

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failing to provide required disclosure statements to investors;

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failing to file disclosure statements with the CFTC and the National
    Futures Association;

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commingling investors' funds with their own;

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failing to provide proper account statements to investors; and

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failing to provide the CFTC access to their books and records.

Defendant Schafer is separately charged with fraud in connection with
    trading for an individual customer, who is not an investor in Genesis,
    between 1993 and 1994. Schafer allegedly received at least $26,000 from
    this customer without being registered as a futures commission merchant and
    allegedly commingled the funds with his own and with that of other
    customers. Schafer is charged with making false statements to the customer
    about the futures transactions completed on the customer's behalf and
    falsely reporting that profits were made in the customer's account.

In its continuing litigation against the defendants, the CFTC is seeking
    permanent civil injunctions prohibiting the defendants from violating the
    federal commodity laws and regulations charged, in addition to other
    remedial relief, including disgorgement and civil monetary penalties.
    Significantly, defendants Schafer, A.R.S., and Alchemy agreed to make
    restitution to customers in the preliminary injunction. The amount of
    restitution will be determined by the court. The preliminary injunction
    against Urbani reserves the CFTC's right to seek restitution from him, as
    well.

The CFTC has been assisted in the filing of this matter by the United
    States Attorney's Office for the Southern District of Texas.

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