Atlantas Group Inc. and hits owner and president Edmund Hysni have reached a $7.2M settlement with the U.S. Commodity Futures Trading Commission. The money is restitution and civil penalty to settle charges of solicitation fraud and the purported making by Hysni of material false statements to the National Futures Association.
According to the CFTC order, between ’06 and ’12 Atlantas and Hysni falsely represented to customers that they would be giving back about 300% of customers’ initial investments, their investment strategy was conservative and safe, and their performance history was a successful one. The charges against the firm and Hysni are related to options on futures contracts trading that took place on the Commodity Exchange and the Chicago Board of Trade.
The regulator said that contrary to the misrepresentations, Hysni and Atlantas invested clients’ funds in an out-of-the-money option spread that caused customers to suffer financial losses. Also, Atlantas is accused of collecting about 90% of clients’ losses in commissions while misrepresenting the impact of the commissions. The commissions, said the SEC, affected customer losses and profits, the trading strategy used, and how much Atlantas charged customers.
Hysni is accused of making the false statements to the NFA during its probe into the fraud allegations. The CFTC said Hysni was liable for the alleged violations committed by Atlantas as its President and owner. The regulator said Atlantas was liable for Hysni’s violations because he acted for the firm.
Jointly and severally, Hysni and Atlantas will pay $5M of restitution and $2.2M of a civil monetary penalty. They are permanently barred from trading on any entities that are registered. They also are no longer allowed to take part in commodity-related activities.
Read the CFTC Order (PDF)