Commodities Futures Trading Commission

By Commodity Futures Trading Commission ….
 

On May 23, the U.S. Commodity Futures Trading Commission (CFTC) announced that Judge Kenneth A. Marra of the U.S. District Court for the Southern District of Florida entered a Consent Order against Guardian Asset Group, LLC (Guardian) of West Palm Beach, Florida, and its owner and principal, Andrew Kurzbard, with a last-known address in Hacksneck, Virginia, finding that Guardian and Kurzbard engaged in illegal, off-exchange transactions in precious metals with retail customers on a leveraged, margined, or financed basis.

The Order requires Guardian and Kurzbard, jointly and severally, to pay restitution of $434,413.54 USD and a $651,620.31 civil monetary penalty. The Order also imposes permanent trading and registration bans against Guardian and Kurzbard and prohibits them from further violating the Commodity Exchange Act, as charged. The Order stems from a CFTC civil enforcement action filed against Guardian and Kurzbard on September 30, 2015, charging them with engaging in illegal, off-exchange precious metals transactions.

Court’s Order Finds that Guardian’s Customers Paid it at Least $1.7 Million for Precious Metals Transactions, Including over $434,000 in Commissions and Fees

According to the Order, from February 2012 through at least February 2013, Guardian, by and through its employees, including Kurzbard, solicited retail customers by telephone to engage in leveraged, margined, or financed precious metals transactions. During that period, Guardian’s customers paid at least $1.7 million to Guardian in connection with precious metals transactions, and Guardian received commissions and fees totaling at least $434,413.54. The Order also finds that Guardian accepted customer orders and funds and therefore acted as a Futures Commission Merchant without registering as such with the CFTC.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, leveraged, margined, or financed transactions, such as those conducted by Guardian, are illegal off-exchange transactions unless they result in actual delivery of metals within 28 days. The Order finds that metals were never actually delivered in connection with the leveraged, margined, or financed precious metals transactions made on behalf of Guardian’s customers.

The Order further finds that Guardian executed the illegal precious metals transactions through AmeriFirst Management, LLC (AmeriFirst). The CFTC filed an enforcement action against AmeriFirst in July 2013, charging it and other defendants with engaging in illegal, off-exchange precious metals transactions, and charging AmeriFirst with fraud and other violations.

On September 17, 2013, the Court entered a Consent Order resolving the CFTC’s claims against AmeriFirst, finding it liable for illegal off-exchange precious metals transactions and fraud.

The CFTC cautions victims that restitution orders may not result in the recovery of money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers to ensure the wrongdoers are held accountable.

CFTC Division of Enforcement staff members responsible for this action are James Humphrey, Elsie Robinson, Stephen Turley, Thomas Simek, Peter Riggs, and Charles Marvine.

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CFTC’s Precious Metals Customer Fraud Advisory

The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Precious Metals Fraud Advisory, which alerts customers to precious metals fraud and lists simple ways to spot precious metals scams.

Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.
 

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