The U.S. Commodity Futures Trading Commission (CFTC) today announced that on May 16, 2014, a federal court in Florida entered an Order finding in the CFTC’s favor following a trial against four Hunter Wise related companies and their owners on charges that they had fraudulently misrepresented the nature of precious metals transactions that resulted in millions of dollars in customer losses.
Hunter Wise Commodities, LLC, Hunter Wise Services, LLC, Hunter Wise Credit, LLC, and Hunter Wise Trading, LLC and the individuals running the companies, Fred Jager and Harold Edward Martin, Jr., have been ordered to pay, jointly and severally, $52.6 million in restitution to the defrauded customers, and to pay a civil monetary penalty, jointly and severally, of $55.4 million, the maximum provided by law.
“This result makes clear that the CFTC will aggressively act to protect customers from fraud. Customers are entitled to know the truth of how their hard-earned money is being used. Here, customers thought Defendants were purchasing precious metals on their behalf and they were not,” said Gretchen L. Lowe, Acting Director of the CFTC’s Division of Enforcement. “This is also another excellent example of how the CFTC is using its new enforcement authority under Dodd-Frank to go after fraudsters.”
The CFTC charged Hunter Wise, Martin, Jager, and others in December 2012 (see CFTC Press Release 6447-12, December 5, 2012). The Court entered a Preliminary Injunction against all of the Defendants on February 22, 2013 (see CFTC Press Release 6522-13, February 27, 2013).
Defendants appealed that ruling, arguing that the CFTC lacked jurisdiction over the conduct at issue, and lost when the United States Court of Appeals for the Eleventh Circuit affirmed the lower’s court’s issuance of the preliminary injunction (see CFTC v. Hunter Wise Commodities, LLC, Case No. 13-10993, April 15, 2014).