UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

INTL FCSTONE FINANCIAL, INC.,

Plaintiff,

v.

PAUL K. YOON, 

Defendant.

 

 

 Case No. 2020-cv-03764

COMPLAINT

Plaintiff INTL FCStone Financial, Inc., by and through its attorneys, Michelman & 

Robinson LLP, for its Complaint against Defendant PAUL K. YOON, alleges, on knowledge of 

its own actions, and otherwise upon information and belief, as follows:

PRELIMINARY STATEMENT

1. Defendant PAUL K. YOON (“YOON”) fraudulently induced Plaintiff INTL

FCStone Financial, Inc. (“INTL”) into opening a Futures & Exchange-Traded Options Account 

wherein YOON would be permitted to engage in futures trading on margin. In connection with the 

futures trading account, YOON made written misrepresentations to INTL about his then existing 

financial condition, along with other misrepresentations, in order to obtain the ability to trade and 

continue to trade on margin; YOON proceeded to amass a seven-figure negative deficit balance in 

his account when YOON failed to post sufficient funds necessary to maintain the positions in his 

account on April 20, 2020, and then made false assurances that funds were forthcoming in order 

to delay liquidation; and YOON admitted that he lied in that he never had funds to cover the deficit 

balance. INTL brings this action to recover the $8,496,946.87 which YOON owes to INTL, as 

Case: 1:20-cv-03764 Document #: 1 Filed: 06/26/20 Page 1 of 14 PageID #:1
— 2 —

well as to recover its losses, including fees and costs of pursuing this action, which arise from the 

fraudulent conduct and actions of YOON.

PARTIES

2. INTL is a corporation organized and existing under the laws of the state of Florida,

which maintains its principal place of business in New York, New York, and which maintains an 

office for its futures commission merchant in Chicago, Illinois.

3. YOON is an individual who, upon information and belief, is a resident of and 

domiciled in the state of New Jersey; a Councilman for the Borough of Fort Lee, New Jersey; and 

an attorney with the law firm of Steinhardt, Cappelli, Tipton & Taylor, LLC.

JURISDICTION

4. This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. 

§ 1332(a)(1), because this matter is between citizens of different states, as detailed below, , and 

the amount in controversy exceeds the sum or value of $75,000.00, exclusive of interest and costs, 

as INTL seeks $8,496,946.87, plus attorneys’ fees.

5. This Court has personal jurisdiction over YOON because YOON contractually 

consented to this Court’s jurisdiction and because this action arises out of activities undertaken by 

YOON within this District, including, but not limited to, opening a Futures & Exchange-Traded 

Options Account at INTL; making representations, warranties and promises to INTL in connection 

with that futures trading account; entering into a written agreement with INTL; engaging and 

authorizing futures trading on contract market exchanges; and breaching his agreement with INTL. 

VENUE

6. Venue is proper pursuant to 28 U.S.C. § 1391(b)(2) in that a substantial part of the 

events or omissions giving rise to the claim occurred within this district.

7. Venue is also proper as YOON contractually agreed that:

Case: 1:20-cv-03764 Document #: 1 Filed: 06/26/20 Page 2 of 14 PageID #:2
— 3 —

28. Governing Law; Consent to Jurisdiction. Customer acknowledges that this 

Agreement is governed by the laws of the State of Illinois. Customer hereby 

submits and consents to the jurisdiction of the Courts of the State of Illinois and, 

shall be amenable to services of summons and other legal process of, and emanating 

from, the State of Illinois. Customer expressly waives the right to the adjudication 

or enforcement of such controversies by any court or any other tribunal sitting in 

any other jurisdiction, and further expressly waives the provisions of any statute or 

administrative ruling defining a commodity or commodity contract to be a security. 

CUSTOMER AGREES CONTROVERSY BETWEEN FCM AND CUSTOMER 

ARISING OUT OF THIS AGREEMENT, REGARDLESS OF THE MANNER 

OF RESOLUTION, SHALL BE ARBITRATED OR LITIGATED IN A COURT 

OF LAW OR OTHERWISE RESOLVED BY A TRIBUNAL LOCATED IN 

CHICAGO, ILLINOIS. CUSTOMER HEREBY WAIVES TRIAL BY JURY IN 

ANY SUCH ACTION OR PROCEEDING.”

(Exhibit A at 23, ¶ 28).

BACKGROUND

A. The Opening of the Account.

8. On February 15, 2018, YOON executed an application (the “Application”) for a 

non-discretionary Futures and Exchange-Traded Options Account (“Futures Trading Account”) 

with INTL. (See Exhibit A at 9)1.

9. The purpose of YOON’s Application was to induce INTL to open a Futures Trading

Account for YOON.

10. YOON’s Application included a form bearing his signature (the 

“Acknowledgement Form”), which acknowledged that the purpose and intention of the 

Application was for INTL to rely on the information YOON would provide. The 

Acknowledgement Form stated:

The undersigned Applicant or agent acting on behalf of the Applicant (the 

“Customer”), acknowledges that the FCM Division of INTL FCStone Financial 

Inc. and INTL FCStone Markets, LLC, respectively, are relying on the information 

1 Page number references to Exhibit A indicate the page number of the Exhibit A PDF rather than to the 

page numbers contained in the text of the document.

Case: 1:20-cv-03764 Document #: 1 Filed: 06/26/20 Page 3 of 14 PageID #:3
— 4 —

herein as the basis of establishing one or more Customer accounts. The undersigned 

certifies, represents and warrants that all information, including audited or 

unaudited financials, or Applicants who fill out the income and net worth 

information in this Account Application and all other information provided is true 

and accurate.

If the Applicant becomes aware of any false statement or failure to state a material 

fact in this Account Application or the Agreements to which this Account 

Application relates and incorporates by reference, or if information contained in 

this Account Application and such Agreements subsequently changes, Applicant

shall immediately notify the FCM Division of INTL FCStone Financial Inc. and 

INTL FCStone Markets, LLC respectively. 

(Exhibit A at 9).

11. Truthful application information is critical to INTL. Applications are strictly 

underwritten by INTL in order to ensure that account-holders are able to assume and bear the risks 

associated with margin trading.

12. The risks are explained in the Application, which notes in the “Commodity Futures 

Trading Commission Risk Disclosure,” inter alia, that:

The risk of loss in trading commodity futures contracts can be substantial. You 

should, therefore, carefully consider whether such trading is suitable for you in light 

of your circumstances and financial resources. You should be aware of the 

following points:

(1) You may sustain a total loss of the funds that you deposit with your broker 

to establish or maintain a position in the commodity futures market, and you 

may incur losses beyond these amounts. If the market moves against your 

position, you may be called upon your broker to deposit a substantial amount of 

additional margin funds, on short notice, in order to maintain your position. If you 

do not provide the required funds within the time required by your broker, 

your position may be liquidated at a loss, and you will be liable for any 

resulting deficit in your account.

(Exhibit A at 10) (emphasis added).

13. The risks of margin trading are further explained in the “Options Disclosure 

Statement,” which states in relevant part:

(4) Margin requirements. An individual should know and understand whether the 

option he or she is contemplating trading is subject to a stock-style or futures-style 

Case: 1:20-cv-03764 Document #: 1 Filed: 06/26/20 Page 4 of 14 PageID #:4
— 5 —

system of margining. Stock-style margining requires the purchaser to pay the full 

option premium at the time of purchase. The purchaser has no further financial 

obligations, and the risk of loss is limited to the purchase price and transaction 

costs. Futures-style margining requires the purchaser to pay initial margin only at 

the time of purchase. The option position is marked to market, and gains and losses 

are collected and paid daily. The purchaser’s risk of loss is limited to the initial 

option premium and transaction costs. An individual granting options under 

either a stock-style or futures-style system of margining should understand 

that he or she may be required to pay additional margin in the case of adverse 

market movements.

(Exhibit A at 13) (emphasis added).

14. Despite signing the Acknowledgement Form, YOON made several 

misrepresentations, including, but not limited to, his then-existing financial condition, in his 

Application with the intent to fraudulently induce INTL into allowing YOON to open an account 

with INTL and trade on margin.

a. With respect to YOON’s “Employment Information,” in his Application,

YOON represented that he was “self-employed” since the year 2012 as an 

“energy trader.” (Exhibit A at 4).

b. YOON’s representation as described in paragraph 14(a) was knowingly false or 

misleading. YOON is presently, and was at the time of his application, a 

practicing attorney and a Councilman for the Borough of Fort Lee, New Jersey, 

and not a self-employed energy trader. YOON’s LinkedIn, a true and accurate 

copy of which is attached as Exhibit B, reveals that was a partner at the law firm 

Wong Fleming, P.C. from November of 2011 to December of 2016, and that he 

has been a partner at the law firm Florio Perrucci Steinhardt and Cappelli, LLC 

from January 2017 to the present. YOON’s LinkedIn does not at any point 

indicate he was an “energy trader.”

Case: 1:20-cv-03764 Document #: 1 Filed: 06/26/20 Page 5 of 14 PageID #:5
— 6 —

c. With respect to YOON’s “Trading Information,” in his Application YOON

represented that his objective was speculative trading, and that he was 

experienced in energy investments since 2012. Upon information and belief, 

this representation was knowingly false. (Exhibit A at 4).

d. With respect to YOON’s “Primary Account Holder’s Financial Information, in 

his Application, YOON represented that his “Annual Revenue from All Sources 

in U.S. Dollars” was “$500,000 - $1,000,000.” (Exhibit A at 7). Upon 

information and belief, this representation was knowingly false.

e. With respect to YOON’s “Primary Account Holder’s Financial Information, in 

his Application YOON represented that his “Total Net Worth in U.S. Dollars” 

was “$1,000,000 - $5,000,000.” (Exhibit A at 7). Upon information and belief, 

this representation was knowingly false.

f. With respect to YOON’s “Primary Account Holder’s Financial Information, in 

his Application, YOON represented that his “Available Working Capital in 

U.S. Dollars” was “$1,000,000 - $5,000,000.” (Exhibit A at 7). Upon 

information and belief, this representation was knowingly false.

g. In his Application, YOON represented, “no,” to the question: “Is any 

controlling person of the Applicant or any member of its immediate family a 

current or former political official in any branch of government or affiliated 

with a government owned enterprise, other than the U.S. Government?” This 

representation was knowingly false, as YOON was at the time a Councilman 

for the Borough of Fort Lee, New Jersey. (See Exhibit B).

Case: 1:20-cv-03764 Document #: 1 Filed: 06/26/20 Page 6 of 14 PageID #:6
— 7 —

15. INTL reasonably relied upon the misrepresentations described in paragraph 14 in 

opening a futures trading account for YOON. Absent these misrepresentations, as well as the 

warranties and promises made by YOON, INTL would not have undertaken the risk of allowing

YOON to open and trade a futures trading account or to engage in the trading strategy which 

YOON implemented.

B. The Futures Account Agreement. 

16. In connection with the opening of the account, YOON also executed a Futures & 

Exchange-Traded Options Account Agreement (“Futures Account Agreement”) in which YOON

acknowledged that “COMMODITIES INTERESTS INVOLVE TRADING IN HIGHLY 

LEVERAGED POSITIONS AND POTENTIALLY RAPIDLY FLUCTUATING MARKETS

AND MAY RESULT IN RAPID AND SIGNIFICANT LOSSES, WHICH MAY BE IN EXCESS 

OF ANY MARGIN DEPOSITED BY CUSTOMER.” (Exhibit A at 18, ¶ 8).

17. In the Futures Account Agreement, YOON agreed at all times to maintain such 

margin in his account as INTL may from time to time in its sole discretion require and that YOON 

would meet all margin calls within the time specified by the INTL, by prompt wire-transfer of 

funds. (Exhibit A at 17, ¶ 4).

18. In the Futures Account Agreement, YOON agreed that, in the event that YOON’s 

account was under-margined, had zero equity or was equity deficit at any time, INTL had the right, 

in its sole discretion, to liquidate all or any part of YOON’s positions through any means available, 

without prior notice to YOON. (Exhibit A at 17, ¶ 4).

19. In the Futures Account Agreement, YOON agreed to indemnify INTL from and 

against any Losses (including reasonable attorneys’ fees) caused directly or indirectly by YOON’s 

failure, breach of, or failure to perform any provision of the Futures Account Agreement or refusal 

Case: 1:20-cv-03764 Document #: 1 Filed: 06/26/20 Page 7 of 14 PageID #:7
— 8 —

to fully and timely comply with any provision of the Futures Account Agreement, as well as any 

misstatement of YOON’s representations and warranties contained in the Futures Account 

Agreement or any other documentation delivered by YOON to INTL that is untrue or ceases to be 

true and correct as of the date of the Futures Account Agreement (Exhibit A at 18, ¶ 7).

20. YOON also agreed to pay promptly to INTL all reasonable attorneys’ fees incurred 

by INTL in the enforcement of any of the provisions of the Futures Account Agreement. (Exhibit 

A at 18, ¶ 7).

21. In the Futures Account Agreement, YOON agreed to pay INTL for the amount of 

any trading loss, debit balance or deficiency in his account and to reimburse INTL for the debit 

and all costs incurred, including reasonable attorney’ fees, in connection with collection actions 

and to pay interest on debits and deficiencies at an annual rate of 1% over the prime rate as 

published by the Wall Street Journal on the date such debit or fee was incurred or other rates as 

negotiated. (Exhibit A at 19, ¶ 9).

22. YOON also agreed that INTL had the sole discretion and right to liquidate the 

account in accordance with Section 18 of the Futures Account Agreement and that Yoon shall be 

liable to pay any deficiency remaining in the account after such action was taken, together with 

interest thereon and all costs relating to liquidation and collection, including reasonable attorneys’ 

fees. (Exhibit A at 21, ¶ 18).

23. Yoon represented and warranted to INTL he was capable of assuming the risks of 

the trading and determined that such trading was suitable and appropriate for YOON. (Exhibit A 

at 23, ¶ 22(e)).

Case: 1:20-cv-03764 Document #: 1 Filed: 06/26/20 Page 8 of 14 PageID #:8
— 9 —

24. Yoon represented and warranted to INTL that the futures transactions contemplated 

by the Futures Account Agreement were suitable and appropriate for YOON and consistent with 

his investment objectives. (Exhibit A at 22, ¶ 22(a)).

25. Yoon represented and warranted to INTL that the Account Application executed 

by YOON in connection with the Futures Account Agreement (including the financial statements 

furnished in connection therewith) is true, correct and complete. YOON further agreed to notify 

INTL in writing within (2) two business days if any of the warranties and representations contained 

therein became inaccurate or in any way ceased to be true and complete. (Exhibit A at 23, ¶ 22(j)).

26. YOON never provided any such notice to INTL.

C. The Trading of the Account.

27. Thereafter, based upon the representations, warranties and promises made by 

YOON to INTL, an account was opened for YOON and YOON began trading his account.

28. YOON traded using margin. That is, when YOON purchased or sold options or 

futures contracts, he did not deposit the full value of the contract in his account. Instead, he made 

good faith deposits, known as margin. 

29. Minimum margin requirements are set by futures exchanges. Exchanges set 

minimum margin requirements, which is the amount of funds that an account-holder must hold in 

its account to buy or sell a futures contract. Once an account-holder establishes a futures position, 

the account-holder continuously must meet minimum maintenance margin requirements. That is, 

the net liquidating value of the account (i.e. the amount of money that would remain in the account 

if all positions were sold) plus the value of any cash in the account must be higher than the 

minimum maintenance margin requirements. 

Case: 1:20-cv-03764 Document #: 1 Filed: 06/26/20 Page 9 of 14 PageID #:9
— 10 —

30. Futures commission merchants (“FCM”), like INTL, are free to add to the 

minimum maintenance margin requirements set by the exchange and require that its accountholder post additional margin, but FCMs cannot set margin requirements that are lower than 

exchange minimums.

31. In addition, FCMs are required each day to post sufficient margin to the exchange 

to cover the obligations of their account-holders, regardless of whether the account-holder has 

sufficient funds in its account with an FCM. Thus, account-holders who fail to maintain minimum 

margin requirements are trading by using the capital of the FCM and their positions can expose 

the FCM and its other account-holders to loss.

32. At all times relevant, YOON traded the account on his own.

33. YOON’s trading strategy initially was successful and generated hundreds of 

thousands of dollars of profits for Yoon. 

34. Prior to April 20, 2020, on the occasions in which YOON ran a margin deficit in 

his account, YOON had always wired funds to INTL to cover his position limits. 

35. YOON withdrew over $2,138,000.00 from his account between on or about January 

3, 2019 and April 7, 2020.

D. The Margin Calls on April 20, 2020. 

36. On Monday, April 20, 2020, during the course of the day, crude oil prices plunged 

below $0 per barrel.

37. As of April 20, 2020, YOON in his futures trading account with INTL had taken a 

significant long position in May crude oil futures.

Case: 1:20-cv-03764 Document #: 1 Filed: 06/26/20 Page 10 of 14 PageID #:10
— 11 —

38. As crude oil prices crashed on April 20, 2020,YOON did not react to these adverse 

market conditions; as a result, YOON’s futures trading account ran a deficit and YOON did not 

wire funds to cover his positions.

39. Instead, throughout the day, YOON represented that he had at least five million 

dollars in liquid assets and was able to cover his deficit balance.

40. Yoon represented that funds were forthcoming to cover the positions.

41. This representation was false at the time it was knowingly made by YOON. 

42. The representations made by YOON was intended to delay liquidation.

43. In reliance of this misrepresentation by YOON, INTL delayed liquidating YOON’s 

positions, which resulted in further financial losses.

44. At or about approximately 2:41 p.m. on April 20, 2020, after speaking with YOON

who now confirmed that funds would not be forthcoming, with YOON’s knowledge, INTL

liquidated YOON’s positions at that time, and disabled YOON’s account access in order to prevent 

any further loss.

45. By the time YOON’s positions were liquidated, his account reflected a margin 

deficit of $8,496,946.87.

46. YOON’s deficit balance was immediately due and payable on April 20, 2020.

47. YOON failed to pay any portion of this debit.

48. On April 24, 2020, demand for payment of the debit was served upon YOON. A 

true and accurate copy of the letter is attached hereto as Exhibit C.

49. To date, YOON has not paid any portion of this debit.

COUNT I – FRAUD AND FRAUDULENT INDUCEMENT

50. INTL repeats and realleges paragraphs 1 through 49 hereof, as if fully set forth 

herein.

Case: 1:20-cv-03764 Document #: 1 Filed: 06/26/20 Page 11 of 14 PageID #:11
— 12 —

51. YOON made numerous knowingly false statements, including, but not limited to,

his then-existing financial condition, in his Application in order induce INTL into opening a 

futures trading account for YOON at INTL.

52. INTL reasonably relied on YOON’s knowingly false statements, representations, 

warranties and promises in opening a futures trading account for YOON and permitting YOON to 

trade futures on margin.

53. YOON made knowingly false statements in order to obtain a futures trading 

account with INTL, concealing his true personal information which he knew would preclude him 

from obtaining such an account as he would be deemed too risky.

54. INTL has been damaged and incurred loss as a result of the fraudulent conduct of 

YOON, an attorney and Councilman for the Borough of Fort Lee, New Jersey.

55. INTL has been damaged in the form of the $8,496,946.87 debt which YOON

incurred and refuses to pay, which arose from a futures trading account that would never have been 

opened had YOON prepared a truthful application.

56. INTL contractually is entitled to an award of attorneys’ fees under the Futures 

Account Agreement. 

COUNT II – BREACH OF CONTRACT

57. Plaintiff repeats and realleges paragraphs 1 through 56 hereof, as if fully set forth 

herein.

58. The Futures Account Agreement is a valid and binding contract.

59. INTL fully performed all of its obligations under the Futures Account Agreement.

60. Within the Futures Account Agreement, YOON agreed that he would be liable for 

any margin deficit in his Futures Trading Account. (Exhibit A at 10).

61. YOON incurred a margin deficit of $8,496,946.87 in his futures trading account.

Case: 1:20-cv-03764 Document #: 1 Filed: 06/26/20 Page 12 of 14 PageID #:12
— 13 —

62. Although YOON agreed to assume the risk of loss associated with his trading 

strategy, agreed to pay any debit balance in his account, and agreed to indemnify INTL for its

losses, YOON failed or refuses to do so in breach of the Futures Account Agreement.

63. INTL demanded payment of the debit from YOON. See Exhibit C.

64. Despite demand YOON has not paid any portion of the $8,496,946.87 debit balance

in his futures trading account.

65. YOON, therefore, breached the Futures Account Agreement.

66. INTL has been damaged in the form of the $8,496,946.87 debit caused by YOON’s 

breach of his representations, warranties, promises and obligations under the Futures Account

Agreement.

67. INTL contractually is entitled to an award of attorneys’ fees under the Futures 

Account Agreement. 

WHEREFORE, INTL FCStone Financial, Inc. requests judgment as follows:

A. On Count One, awarding damages in favor of INTL, in an amount to be determined 

at trial, but not less than the $8,496,946.87 debit balance due and owing from 

YOON to INTL, plus attorneys’ fees and costs and pre-judgment interest;

B. On Count Two, awarding damages in favor of INTL, in an amount to be determined 

at trial, plus attorneys’ fees and costs and pre-judgment interest;

C. Granting INTL such other and further relief as the Court deems just and proper.

Case: 1:20-cv-03764 Document #: 1 Filed: 06/26/20 Page 13 of 14 PageID #:13
— 14 —

Dated: June 26, 2020 Respectfully Submitted,

MICHELMAN & ROBINSON, LLP

/s/ Seth E. Darmstadter

Seth E. Darmsdadter (ARDC #6284759)

Matthew R. Lasky (ARDC #6318140)

sdarmstadter@mrllp.com

mlasky@mrllp.com

200 South Wacker Drive, Suite 2900

Chicago, IL 60606-5896

Tel: (312) 638-5671

Fax: (312) 638-5672

Attorneys for Plaintiff

Case: 1:20-cv-03764 Document #: 1 Filed: 06/26/20 Page 14 of 14 PageID #:14