Release: #4215-98 (95Civ-279-A)

For Release: December 17, 1998

Kentucky District Court Enters Consent Order of
    Permanent Injunction Against Charles Nicholas Barth in Commodity Pool Fraud
    Case

Washington -- The Commodity Futures Trading Commission (CFTC) announced
    today that on December 1, 1998, Judge Charles M. Allen of the U.S. District
    Court for the Western District of Kentucky entered an order, by consent,
    barring Charles Nicholas Barth, defendant in CFTC v. Charles
    Nicholas Barth, Case No. 3:95CV-279-A (W.D. Ky. April 4, 1995), from
    violating the antifraud, segregation of customer funds, registration, and
    disclosure provisions of the Commodity Exchange Act (CEA) and requiring him
    to make restitution to defrauded investors.

In its consent order of permanent injunction, the court found that Barth
    committed all of the violations alleged in the CFTC’s seven-count
    complaint filed on April 4, 1995 (see CFTC News Release #3833-95, April 6,
    1995). The court found that, from at least September 1986 to at least
    January 1995, Barth, among other things, fraudulently misrepresented he was
    profitably trading customer accounts, the risks associated with trading
    commodity futures and option contracts, the aggregate size of accounts he
    managed, and his success rate in trading commodity futures and option
    contracts.

The court also found that Barth distributed, or caused to be
    distributed, to customers account statements in which he misrepresented the
    changes in net asset value and income and/or losses realized in their
    accounts. In addition, the court found that Barth commingled customer funds
    with his own funds; failed to register with the CFTC as a commodity pool
    operator (CPO), futures commission merchant (FCM) and associated person of
    a CPO and FCM; failed to deliver or cause to be delivered disclosure
    documents to prospective participants; failed to furnish statements of
    account in a form and manner specified by the CFTC to all participants in
    his commodity pool operations; and failed to file certain reports in the
    form and manner prescribed by the CFTC.

Barth agreed to a permanent injunction barring him from violating the
    following provisions of the Act and the CFTC regulations: sections 4b(a)
    and 4o of the Act (antifraud provisions); regulation 4.20
    (commingling funds); section 4m of the Act and regulation 4.13 (CPO
    registration requirements); section 4d(1) of the Act (FCM registration
    requirements); section 4k of the Act and regulation 3.12 (associated person
    registration requirements); and section 4n of the Act and regulation 4.21
    (requirement to file with the CFTC and provide to prospective pool
    participants a disclosure document).

In addition, Barth consented to a permanent ban on seeking registration
    under the Act and a permanent prohibition on trading on any futures market
    on behalf of himself or others. Finally, Barth is required to pay
    $2,292,902.20, which represents restitution to all investors plus
    pre-judgment interest, by making annual payments based on a percentage of
    his future income.

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