Opinion
Case No. 03-3265 JFW (RCx).
April 1, 2004
Mark H. Bretscher, Robert J. Greenwald, Scott R. Williamson, Commodity Futures Trading Commission Chicago, IL.
Edwin J. Yoshimura, Commodity Futures Trading Commission, Chicago, IL, Attorneys for Plaintiff.
CONSENT ORDER OF PERMANENT INJUNCTION AND OTHER EQUITABLE RELIEF AGAINST DEFENDANT OSCAR GOLDMAN
On May 9, 2003, plaintiff Commodity Futures Trading Commission ("Commission") filed a Complaint against Oscar Goldman ("Goldman" or "defendant") seeking injunctive and other equitable relief for violations of the Commodity Exchange Act, as amended ("Act"), 7 U.S.C. §§ 1 et seq. (2001), and the Regulations promulgated thereunder, 17 C.F.R. §§ 1 et seq. (2002). Entry of this Consent Order of Permanent Injunction and Other Equitable Relief would conclude this action against defendant Goldman.
I. CONSENTS AND AGREEMENTS
To effect settlement of the matters alleged in the Complaint against Goldman without a trial on the merits or any further judicial proceedings, defendant Goldman:
1. Consents to the entry of this Consent Order of Permanent Injunction and Other Equitable Relief Against Defendant Oscar Goldman ("Order").
2. Affirms that the defendant has agreed to this Order voluntarily, and that no promise or threat has been made by the Commission or any member, officer, agent or representative thereof, or by any other person, to induce consent to this Order, other than as set forth specifically herein.
3. Acknowledges service of the Summons and Complaint.
4. Admits jurisdiction of this Court over him and the subject matter of this action pursuant to Section 6c of the Act, 7 U.S.C. § 13a-1 (2001).
5. Admits that venue properly lies with this Court pursuant to Section 6c of the Act, 7 U.S.C. § 13a-1 (2001).
6. Waives:
a. the entry of findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil Procedure, except as set forth below;
b. all claims which he may possess under the Equal Access to Justice Act, 5 U.S.C. § 504 (2000) and 28 U.S.C. § 2412 (2000), and Part 148 of the Regulations, 17 C.F.R. § 148.1, et seq. (2003), relating to, or arising from, this action;
c. any claim of double jeopardy based upon the institution of this proceeding or the entry in this proceeding of any order imposing a civil monetary penalty or any other relief; and
d. all rights of appeal from this Order.
7. By consenting to the entry of this Order, defendant Goldman neither admits nor denies the allegations of the Complaint except as to jurisdiction and venue, which he admits. Defendant Goldman agrees that neither he nor any of his agents or employees acting under his authority or control shall take any action or make any public statement denying, directly or indirectly, any allegation in the Complaint or findings or conclusions in this Order, or creating, or tending to create, the impression that the Complaint or this Order is without a factual basis; provided, however, that nothing in this provision shall affect defendant's (i) testimonial obligations; or (ii) his right to take legal positions in other proceedings to which the Commission is not a party. Defendant shall take all necessary steps to ensure that all of his agents and employees understand and comply with this agreement.
8. Defendant consents to the continued jurisdiction of this Court for the purpose of enforcing the terms and conditions of this Order and for any other purposes relevant to this case.
II. FINDINGS AND CONCLUSIONS
It further appearing to this Court that there is no just reason for delay, the Court being fully advised in the premises and the Court finding that there is just cause for entry of this Order that fully disposes of all issues in this matter, THE PARTIES AGREE AND THE COURT FINDS THAT:
1. This Court has jurisdiction over the subject matter of this action and all parties hereto pursuant to Section 6c of the Act, 7 U.S.C. § 13a-1 (2001), which authorizes the Commission to seek injunctive relief against any person whenever it shall appear that such person has engaged, is engaging or is about to engage in any act or practice constituting a violation of any provision of the Act or any rule, regulation or order thereunder.
2. This Court has personal jurisdiction over Goldman and Goldman has waived service of Summons and Complaint and consented to the Court's jurisdiction over him.
3. Venue properly lies with this Court pursuant to Section 6c of the Act, 7 U.S.C. § 13a-1, in that the defendant is found in, inhabits, or transacts business in this district, and the acts and practices in violation of the Act have occurred, are occurring, or are about to occur within this district, among other places.
III. ORDER FOR PERMANENT INJUNCTION
IT IS HEREBY ORDERED, ADJUDGED AND DECREED that:
1. Defendant Goldman is permanently restrained, enjoined and prohibited from directly or indirectly:
A. Cheating, defrauding or willfully deceiving or attempting to cheat, defraud or willfully deceiving other persons, in or in connection with any order to make, or the making of, any contract of sale of any commodity for future delivery, made, or to be made, for or on behalf of any other person if such contract for future delivery is or may be used for (a) hedging any transaction in interstate commerce in such commodity or the products or byproducts thereof, or (b) determining the price basis of any transaction in interstate commerce in such commodity, or (c) delivering any such commodity sold, shipped, or received in interstate commerce for the fulfillment thereof, in violation of Section 4b(a)(2)(i) and (iii) of the Act, 7 U.S.C. § 6b(a)(2)(i) and (iii); and
B. Operating as a commodity trading advisor ("CTA") who for compensation or profit, engages in the business of advising others, either directly or through publications, writings or electronic media, as to the value of or the advisability of trading in any contract of sale of a commodity for future delivery made or to be made on or subject to the rules of any contract market or derivatives transaction execution faculty, without being registered with the Commission as a CTA, in violation of Section 4m(1) of the Act, 7 U.S.C. § 6m(1); and
C. While acting as a CTA, employing any device, scheme, or artifice to defraud any investor or prospective investor, or engaging in any transaction, practice, or course of business which operates as a fraud or deceit upon any investor or prospective investor by use of the mails or any means or instrumentality of interstate commerce, in violation of Section 4o(1) of the Act, 7 U.S.C. § 6o(1); and
D. While acting as a CTA, registered or required to be registered with the Commission, soliciting a prospective client, or entering into an agreement with a prospective client to direct the client's commodity interest account or to guide the client's commodity interest trading by means of a systematic program that recommends specific transactions, unless at or before the time he engages in the solicitation or enters into the agreement (which ever is earlier), delivers or causes to be delivered to the prospective client a Disclosure Document for the trading program pursuant to which he seeks to direct the client's account or to guide the client's trading, containing the information set forth in 17 C.F.R. § 4.34 and 4.35, in violation of Regulation 4.31.
2. Defendant Goldman is further permanently restrained, enjoined and prohibited from directly or indirectly:
A. Engaging in, controlling, or directing the trading of any commodity futures, options on futures, or options on foreign currency accounts for or on behalf of any other person or entity, whether by power of attorney or otherwise; and
B. Applying for registration or claiming exemption from registration with the Commission in any capacity, and engaging in any activity requiring such registration or exemption from registration, except as provided for in Section 4.14(a)(9) of the Commission's Regulations, 17 C.F.R. § 4.14(a)(9)(2002), or acting, directly or indirectly, as a principal, agent, or any other officer, agent or employee of any person registered, required to be registered, or exempted from registration with the Commission, unless such exemption is pursuant to Section 4.14(a)(9) of the Commission's Regulations, 17 C.F.R. § 4.14(a)(9). This includes, but is not limited to, soliciting, accepting or receiving any funds, revenue or other property from any person, giving advice for compensation, or soliciting prospective customers related to the purchase or sale of any commodity futures or options on futures.
3. The injunctive provisions of this Order shall be binding on defendant Goldman and upon any person insofar as he or she is acting in the capacity of officer, agent, servant, employee or attorney of the defendant, and upon any person who receives actual notice of this Order by personal service or otherwise insofar as he or she is acting in active concert or participation with defendant Goldman.
IV. ORDER FOR OTHER EQUITABLE RELIEF
IT IS FURTHER ORDERED THAT:
1. DISGORGEMENT: Defendant Goldman shall pay disgorgement in the amount of $95,500. Goldman shall make such payment by electronic funds transfer, or by U.S. postal money order, certified check, bank cashier's check, or bank money order, made payable to the Commodity Futures Trading Commission, and sent to Dennese Posey, Division of Enforcement, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581, under cover of a letter that identifies Goldman and the name and docket number of the proceedings.
2. CIVIL MONETARY PENALTY: Goldman shall pay a contingent civil monetary penalty of $180,000, commencing on his fulfillment, or the discharge, of his total disgorgement obligations as set forth in Paragraph IV.1., above. Goldman shall make such payment by electronic funds transfer, or by U.S. postal money order, certified check, bank cashier's check, or bank money order, made payable to the Commodity Futures Trading Commission, and sent to Dennese Posey, Division of Enforcement, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581, under cover of a letter that identifies Goldman and the name and docket number of the proceedings.
V. MISCELLANEOUS PROVISIONS
A. ENTIRE AGREEMENT, AMENDMENTS and SEVERABILITY. This Order incorporates all of the terms and conditions of the settlement among the parties. Nothing shall serve to amend or modify this Order in any respect whatsoever, unless: (1) reduced to writing, (2) signed by all parties, and (3) approved by order of the Court. If any provision of this Order or the application of any provision or circumstance is held invalid, the remainder of this Order shall not be affected by the holding.
B. WAIVER. The failure of any party at any time or times to require performance of any provision hereof shall in no manner affect the right of such party at a later time to enforce the same or any other provision of this Order. No waiver in one or more instances of the breach of any provision contained in this Order shall be deemed to be, or construed as, a further or continuing waiver of such breach or waiver of the breach of any other provision of this Order.
C. SUCCESSORS AND ASSIGNS. This Order shall inure to the benefit of and be binding on the parties' successors, assigns, heirs, beneficiaries and administrators.
D. TRANSFER OF ASSETS. Defendant Goldman shall not transfer or cause others to transfer funds or other property to the custody, possession, or control of any other person for the purpose of concealing such funds from the Court or the Commission until the disgorgement and civil monetary payments have been paid in full, including interest.
E. JURISDICTION. This Court shall retain jurisdiction of this cause to assure compliance with this Order and for all other purposes related to this action.
There being no just reason for delay, the Clerk of the Court is hereby directed to enter this Consent Order of Permanent Injunction and Other Equitable Relief Against Defendant Oscar Goldman.
Done and ordered.