Cromwell Financial Services Inc. and several of its employees says they will pay over $20 million to settle allegations by the state of New Hampshire and the Commodity Futures Trading Commission that they engaged in fraudulent solicitations.
The New Hampshire Bureau of Securities Regulation and the CFTC claim that Cromwell Financial Services and a number of its employees, from 2002 to 2003, engaged in sales presentations that were fraudulent and misleading in an attempt to convince some 900 people to trade options on commodity futures contracts. The options were from commodity futures contracts in accounts at two futures commission merchants.
According to the Consent Order of Permanent Injunction and Other Equitable Relief, Cromwell employees allegedly exaggerated the degree and possibility of profit, while minimizing the investment risks, and neglected to inform the public that over 75% of Cromwell investors have lost money.
Cromwell compliance director Michael Staryk, and branch managers Dennis Gee, Richard Astern, and Richard Peluchette were all accused of failing to properly supervise other Cromwell employees. Cromwell controlling person and founder Philip Tuccelli also was held liable for failure to supervise and alleged fraud.
Gee has agreed to pay $523,000 in restitution to investors. Peluchette agreed to pay $241,000. Astern agreed to pay $285,000. Staryk will pay $130,000. Tuccelli and Cromwell will pay $9.2 million, with Tuccelli’s fine held to a $2 million cap. They all have also agreed to pay civil monetary penalties for their alleged misconduct.
The defendants are no longer allowed to participate in any commodity trading activity. By agreeing to the settlement terms, none of the defendants are admitting to or denying the charges.
In order to ensure that you actually recoup your lost investment caused by the misconduct of a member of the securities industry, you should speak with a securities litigation attorney right away. Shepherd Smith and Edwards has helped thousands of investors recover their losses. Contact Shepherd Smith and Edwards today for your free consultation.
Related Web Resources:
Florida CTA Fined $20 Million For Fraud, Fin Alternatives, November 7, 2007
CFTC Press Release 5083-05, CFTC.gov, June 16, 2005