**Release: 4508-01 (01-8329-Civ-Moreno)**

**For Release: April 19, 2001**

**CFTC CHARGES SUNSTATE FX, INC. AND ULRICH GARBE OF BOCA RATON,      FLORIDA, WITH FRAUD IN CONNECTION WITH THE SOLICITATION OF INVESTORS TO      TRADE FOREIGN CURRENCY (FOREX) CONTRACTS**

**Complaint Alleges that SunState and Garbe Fraudulently Operated a      Commodity Pool and Illegally Offered Foreign Currency Options to the      Retail Public; Court Enters *Ex Parte* Restraining Order Against the      Defendants on the Same Day the Complaint is Filed**

      WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced      today that on April 18, 2001, the Commission filed a four-count complaint      against **SunState FX, Inc.**, a Florida corporation, and **Ulrich      Garbe**, both of Boca Raton, Florida, charging them with violations of      the Commodity Exchange Act (CEA) in connection with their solicitation of      investors to trade foreign currency contracts, which resulted in the      fraudulent operation of a commodity pool, the illegal offer and sale of      commodity options and registration violations. On the same day that the      complaint was filed, the Honorable Federico A. Moreno of the U.S.      District Court for the Southern District of Florida entered an ***ex      parte*** restraining order against the defendants preventing the      destruction of documents.    

      The CFTC complaint charges that, from at least March 2000 to the present,      SunState and Garbe, SunState's chief investment officer, have      solicited, accepted, and pooled funds from investors, purportedly to      trade forward and spot foreign currency. The complaint further alleges      that, in April 2000, SunState and Garbe defrauded SunState investors by      misappropriating and transferring $1 million of their commingled funds --      which had been solicited to trade foreign currencies -- into a commodity      trading account and thereafter by trading commodity futures without their      knowledge and consent. By such acts, the complaint alleges, SunState      fraudulently operated a commodity pool in that SunState was not      registered with the Commission as a commodity pool operator.    

      In addition, the CFTC complaint alleges that, since December 21, 2000,      SunState and Garbe have also solicited investors to enter into      transactions in retail foreign currency options in violation of the CEA      and Commission regulations. Specifically, the complaint alleges that      SunState and Garbe purportedly sold to at least one investor options on      Euros, which were not traded on a contract market designated by the CFTC.      As alleged, SunState is not a designated contract market and thus      defendants were offering illegal foreign currency options.    

**CFTC Obtains Restraining Order and Seeks Preliminary and Permanent      Injunctive Relief**

      Simultaneously with the filing of the complaint, the CFTC sought and      obtained an ex parte restraining order prohibiting the defendants from      destroying documents. In its continuing litigation against the      defendants, the CFTC is seeking preliminary and permanent injunctive      relief, restitution to customers, disgorgement of ill-gotten gains, and      civil monetary penalties in the amount of not more than the higher of      $110,000, or $120,000 for violations on or after October 23, 2000, or      triple the monetary gain to the defendants for each violation of the CEA      and CFTC regulations.    

**CFTC Action Is Part of Coordinated Cooperative Enforcement      Activities**

      As part of a coordinated cooperative enforcement effort with the U.S.      Securities and Exchange Commission (SEC), the SEC also filed a civil      injunctive action against SunState, Garbe, and two other SunState      officers for violations of the federal securities laws arising out the      same underlying facts.    

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