CFTC’s $4.5 Million Win Against Commodity Pool Fraud Scheme

CFTC Whistleblower Program

The U.S. Commodity Futures Trading Commission (CFTC) saw a big win following their complaint against a Delaware-based investment company, resulting in the recoup of $4.5 million. The three-year scheme carried out by STA Opus and its primary owner, Gerard Suite, resulted in the loss of millions of dollars in customer funds, directly stemming from the company’s misrepresentation of their annual return reports and their standing with the CFTC.

The primary complaint brought against STA Opus regarded their fraudulent operation as a Commodity Pool Operator (CPO), when they were not registered as such with the CFTC. By definition, these operators engage in investments by pooling funds from multiple individual investors and trade as a single entity in order to gain leverage. Though commodity pools are a common practice and are regularly carried out lawfully, STA Opus was not eligible to perform such trading practices due to Suite’s prior revocation of his CFTC registration following his involvement in a 2015 scheme in which he was practicing as an unregistered investment advisor – another fact he failed to disclose to prospective customers when soliciting their business.

During the CFTC’s investigation, it was found that from at least January of 2013, STA Opus was purposefully misleading customers by alleging they had positive annual rates of return. However, the annual reports proved otherwise, with all three commodity future trading accounts owned by the company showing negative returns so significant that they were consistently losing virtually all of the funds they committed to trading. The forged account statements provided concealed over $1.3 million in trading losses, claiming instead that the company was highly profitable. These falsifications allowed them to continue soliciting pool participants for funds, with more than $1.6 million received from over 30 investors during the course of the scheme.

Further, STA Opus would regularly request voided checks from their customers in efforts to receive their banking information, which permitted them to withdraw funds directly from their respective bank accounts. This practice landed the company in further hot water, resulting in additional charges of wire fraud. Of these funds, STA Opus was found to have misappropriated $1,127,855 in client funds for their personal benefit. The CFTC’s complaint against the company and its entities seeks to request full restitution for the fraudulently obtained funds, in an attempt to reimburse the customers for all losses suffered as a result of STA Opus’s deceptive tactics.

The CFTC regularly issues fraud advisories due to the prevalence of these schemes, outlining the red flags that could potentially lead to customer involvement in inappropriate trading arrangements. A Commodity Pool Fraud Advisory was published to alert the public to the dangers that are so frequently masked by CPO’s such as STA Opus. The information provided details a list of precautions that can be taken, as well as numerous tools that can be utilized to determine the validity of any prospective investment opportunity.

Whistleblower Justice Network Can Help You

Whistleblower Justice Network partners with whistleblowers in an attempt to expose financial fraud schemes that directly violate the standards of the U.S. Commodity Futures Trading Commission. Utilizing the CFTC’s Whistleblower Program, we work together with whistleblowers to bring forth a powerful and compelling case whilst protecting anonymity by any means necessary. Together, we aim to bring to justice companies and individuals alike who employ such fraudulent tactics in an attempt to line their own pockets.

If you have meaningful information about commodity futures trading that you believe is in violation of the CFTC, Whistleblower Justice Network can help. Working alongside world-class legal counsel, we will ensure you are protected to the fullest extent of the law and that you receive credit for the information you bring to the U.S. government. Partnering with whistleblowers is all we do. Visit us at www.whistleblowerjustice.net, or call us at 844-WJN-4ALL, to learn if we can help you.

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