Release: #3944-96 (Civ 96-2185)

For Release:September 25, 1996

*EX PARTE* ASSET FREEZE ORDER ISSUED BY ARIZONA COURT IN CFTC ANTI-    FRAUD ENFORCEMENT ACTION AGAINST UNITED METALS TRADING CORP., WESTERN    NATIONAL TRADING, ANTHONY F. ANDREWS, & MARVIN C. PENDERGRAFT

Arizona Joins CFTC as Co-plaintiff in the 10-Count Injunctive Action;    Arizona Judge Issues *Ex Parte* Order in the Case, Freezing    Defendants' Assets and Protecting Books and Records

WASHINGTON - The Commodity Futures Trading Commission (CFTC) announced    today that on September 23, 1996, the Honorable Paul G. Rosenblatt of the    U.S. District Court for the District of Arizona entered ***ex    parte*** and temporary restraining orders against **United Metals    Trading Corporation**, **Western National Trading**, and **Anthony F.    Andrews**, of Scottsdale, Arizona, and **Marvin C. Pendergraft**, of    Phoenix, Arizona.

None of the defendants has ever been registered with the CFTC, except    Andrews, who, although not currently registered, was a registered    associated person between November 1978 and January 1991. Andrews is a    United Metals director and vice president and Pendergraft is its director    and the corporate secretary; both are general partners of Western National    Trading.

The court's order freezes the defendants' assets and prohibits the    defendants from destroying books and records and from denying CFTC    representatives access to such records. The temporary restraining order    further prohibits the defendants from violating the *Commodity Exchange    Act (CEA),* CFTC regulations, and the *Arizona Securities Act* and    from soliciting new customers or new deposits.

**CFTC Charges Defendants with Violating Anti-fraud Provisions of    Federal Commodity Law by, Among Other Things, Cheating and Defrauding    Customers While Acting as an Unregistered Commodity Pool Operator and    Futures Commission Merchant**

The court's action stems from a 10-count civil complaint filed jointly    by the CFTC and the Arizona Corporations Commission alleging that the    defendants violated Federal commodity law and CFTC regulations by    committing fraud while acting as an unregistered commodity pool operator    (CPO) and unregistered futures commission merchant (FCM). In addition, the    complaint charges that the defendants violated Arizona law by selling    unregistered instruments and committing fraud in connection with such    sales.

Specifically, the complaint alleges that, among other things, defendants    engaged in a "Ponzi" scheme whereby they:

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made false oral and written representations of profit;

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issued false trading statements to customers;

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failed to segregate customer funds;

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failed to register with the CFTC as a CPO;

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operated the pool in a fraudulent or deceptive manner;

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failed to operate the pool as a separate legal entity; and

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failed to provide customers with the required disclosure documents.

**Hearing Scheduled for October 3rd**

A hearing on a preliminary injunction is set before U.S. District Court    Judge Roger G. Strand at 9:30 a.m. on October 3, 1996, in Phoenix.

In its litigation against the defendants, the CFTC is seeking    preliminary and permanent civil injunctions, in addition to other remedial    relief, including, cease and desist orders, an accounting, disgorgement of    unlawfully obtained benefits, restitution to customers, and civil penalties    of $100,000, or triple the monetary gain, against each defendant, whichever    is greater, for each violation of the *CEA*.

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