Release: #3923-96 (Civ 95C 0285)

For Release: July 11, 1996

ILLINOIS COURT ISSUES PERMANENT INJUNCTION IN CFTC ANTI-FRAUD ACTION
    AGAINST ZEBEDEE McLAURIN, V., OF CHICAGO REQUIRING RESTITUTION OF CUSTOMER
    FUNDS, AMONG OTHER SANCTIONS

The CFTC Charged that McLaurin Committed Fraud by Misrepresentation,
    Misappropriation of Customer Funds, and Issuing False Statements to
    Customers

WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced
    today that on July 1, 1996, U.S. District Court Judge George M. Marovich
    for the Northern District of Illinois entered an order granting the CFTC's
    motion for summary judgment and issuing a permanent injunction against Zebedee McLaurin, V., of Chicago, Illinois, who was charged with
    violating the anti- fraud provisions of the Commodity Exchange Act (CEA) in
    a two- count civil injunctive complaint filed by the CFTC on January 17,
    1995, (see CFTC Release #3808-95, January 18, 1995). McLaurin, who does
    business as ZMV Capital (ZMV), is not registered with the Commission
    in any capacity.

In its complaint, the CFTC alleged that McLaurin committed fraud by
    making false representations to customers, issuing false statements to
    customers, and misappropriating customer funds in connection with a
    commodity futures investment scheme he operated from at least October 1992
    until the present.

Specifically, McLaurin allegedly solicited approximately $70,000 from at
    least four customers to invest in commodity futures through ZMV by making
    false representations to them concerning his performance record and the
    nature of the investment risk, and by providing customers with account
    statements from ZMV that showed that profits were made for their accounts,
    when, in fact, no profits were ever earned. McLaurin also was charged in
    the complaint with misappropriating most of the customer funds
    solicited.

In granting the CFTC's motion for summary judgment, the court found
    "undisputed evidence that McLaurin misappropriated" customer monies.
    Additionally, the court found that "no reasonable jury could conclude other
    than that McLaurin prepared and distributed false reports or statements to
    customers" about the status of their accounts. The court found that this
    conduct violates the anti-fraud provisions of section 4b of the CEA.

The court's permanent injunction

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enjoins McLaurin from defrauding customers and making false statements
    to customers,

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rescinds all of McLaurin's contracts with existing customers, and

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prohibits McLaurin from soliciting or accepting any new customers or new
    deposits of funds for commodity futures trading.

Restitution and Civil Monetary Penalty to be Determined
    Separately

The court also found that given McLaurin's fraud, "it is only
    appropriate that this court order McLaurin to pay restitution" to the
    injured customers. The court ordered the CFTC to submit a statement to the
    court detailing the amounts of customer restitution to be paid by McLaurin.
    In addition, the court ordered the CFTC to submit a statement recommending
    the proper amount of the civil penalty for each of McLaurin's violations of
    the CEA. The complaint requested a civil monetary penalty of $100,000, or
    triple the monetary gains to the defendant, whichever is greater, for each
    violation.

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