Submitted by Tyler Durden on 03/27/2013
Earlier today, the CFTC issued an order and charges against two Boca Raton companies, (Joseph Glenn Commodities LLC and JGCF LLC, and their owners Scott Newcom and Anthony Pulieri) which accused the abovementioned of engaging in illegal, fraudulent off-exchange financed transactions in precious metals with retail customers, and also ordered them to pay over $1 million in restitution payments. Superficially, it would have been any other run-off-the-mill CFTC wristslap against an entity that is deemed not TBTF, and thus systematically relevant, in the parlance of the DOJ (unlike the Jon Corzines of the world, who are perpetually absolved of all crimes – actual and alleged), if only it wasn’t for one small clarification at the end of the body.
The relevant section is bolded below:
The CFTC Order finds that from July 2011 through June 2012, the Respondents solicited retail customers, generally by telephone or through Joseph Glenn’s website, to buy physical precious metals such as gold, silver, copper, platinum, or palladium in what are known as off-exchange leverage transactions. According to the Order, the customers paid the Respondents a portion of the purchase price for the metals, and Joseph Glenn and JGCF purportedly financed the remainder of the purchase price, while charging the customers interest on the amount they purportedly loaned to customers.
[T]he CFTC Order states that when Joseph Glenn and JGCF engaged in these illegal transactions they were acting as dealers for a metals merchant called Hunter Wise Commodities, LLC (Hunter Wise), which the CFTC charged with fraud and other violations in federal court in Florida on December 5, 2012 (see CFTC Press Release 6447-12). Hunter Wise was purportedly Joseph Glenn’s and JGCF’s source for the metal and the loans. As alleged in the CFTC Complaint against Hunter Wise and according to the CFTC Order in this case, however, neither Joseph Glenn, JGCF, nor Hunter Wise purchased or held metal on the customers’ behalf, or disbursed any funds to finance the remaining balance of the purchase price. The Order finds that the Respondents’ customers thus never owned, possessed, or received title to the physical commodities that they believed they purchased.
Read more: here