The U.S. Commodity Futures Trading Commission has ordered Jacob Stein to pay $244,400 in restitution and $100,000 in penalties for committing fraud against his customers using a commodity pool that traded leveraged or margined off-exchange foreign currency contracts, the agency announced on Monday.
The CFTC claims that Stein, who was doing business as TEPdesign Inc., did not register his pool with the CFTC, and solicited and received about $524,000 from no less than 17 investors who participated in the commodity pool, despite the fact that it lost $80,000 of the $83,000 used in foreign exchange trading. The customers remained active investors in the pool even though it was losing money because Stein had allegedly put together fake account statements showing that he was earning profits. The statements Stein allegedly fabricated were sent over to investors weekly, and indicated steady gains of roughly 1 percent..
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