UNITED STATES DISTRICT COURT
FOR THE
SOUTHERN DISTRICT OF FLORIDA
________________________________________
:
Commodity Futures Trading Commission, :
: CIVIL ACTION NO.
and : 95-6221-CIV-Gonzalez
: Magistrate Snow
The State of Florida, Department of :
Legal Affairs, Office of the Attorney :
General, :
: AMENDED
Plaintiffs, : COMPLAINT FOR
v. : EX PARTE RESTRAINING
: ORDER, TEMPORARY
JDI Limited Inc. d/b/a Future Vision, : RESTRAINING ORDER,
Richard A. Bandemer, Fredrick W. Taft, : PRELIMINARY AND
Oster Communications Inc. d/b/a : PERMANENT INJUNCTIONS,
Future Source, and Future Source : ANCILLARY EQUITABLE
Information Systems Inc., : RELIEF, AND CIVIL
: FINES
Defendants. :
________________________________________:
I.
INTRODUCTION
Plaintiffs Commodity Futures Trading Commission ("Commission") and the State of Florida, Department of Legal Affairs, Office of the Attorney General ("State of Florida"), hereby allege that defendants JDI Limited Inc. d/b/a Future Vision ("Future Vision"), Richard A. Bandemer ("Bandemer"), and Frederick W. Taft ("Taft") have engaged in acts and practices which constitute violations of the anti-fraud and registration provisions of the Commodity Exchange Act ("Act"), as amended, 7 U.S.C. 1 et seq. (1988 & Supp. IV), and the Commission's Regulations ("Regulations"). 17 C.F.R. 1 et seq. (1994). Specifically, plaintiffs allege defendants Future Vision, Bandemer, and Taft violated Sections 4b(a)(i), 4m(1), and 4o(1)(A)-(B) of the Act, and Regulations 4.41(a)(1)-(2). 7 U.S.C. 6b(a)(i), 6m(1), 6o (1)(A),(B); 17 C.F.R. 4.41(a)(1),(2).
The Commission and the State of Florida hereby further allege that defendants Oster Communications Inc. d/b/a Future Source and Future Source Information Systems Inc. (hereinafter collectively referred to as defendant "Oster") engaged in acts and practices which constitute violations of the Act and Regulations. Specifically, plaintiffs allege defendant Oster conducted business as a commodity trading advisor without registering with the Commission as such in violation of Section 4m(1) of the Act. 7 U.S.C. 6m(1). In addition, plaintiffs allege that Oster is liable pursuant to Sections 2(a)(1)(A)(iii), 13(a), and 13(b) of the Act for the fraudulent and unregistered acts committed by defendants Future Vision and Bandemer because (a) defendants engaged in the illegal activities as part of, pursuant to, and within the scope of a joint venture and/or agency relationship with Oster; (b) Oster knowingly aided and abetted defendants illegal activities; and (c) Oster, directly or indirectly, controlled defendants, and failed to act in good faith and/or knowingly induced the acts constituting the violations. 7 U.S.C. 4, 13c.
Accordingly, pursuant to Sections 6c and 6d of the Act, 7 U.S.C. 13a-1, 13a-2, plaintiffs seek orders of preliminary and permanent injunction enjoining defendants from engaging in the fraudulent and unlawful activities described below in Counts I, II, III, and IV, and granting plaintiffs such other equitable relief as may be necessary or appropriate under the circumstances, including, but not limited to (1) a protective order pendente lite, (2) a freeze of assets, (3) the appointment of a receiver, (4) an accounting, and (5) the disgorgement of unlawfully obtained funds.
In addition, pursuant to Section 6c(d) of the Act, 7 U.S.C. 13a-1(d), plaintiffs request the Court to assess against each defendant a civil penalty in the amount of not more than one hundred thousand dollars ($100,000), or triple the monetary gain to that defendant, for each violation of the Act and Regulations.
Plaintiff State of Florida further alleges in Counts V, VI, VII, and VIII that defendants have violated and continue to violate Florida's Deceptive and Unfair Trade Practices Act Chapter 501, Part II, Florida Statutes (1993); Florida's Sale of Business Opportunities Act, Chapter 559, Part VIII, Florida Statutes (1993); and Chapter 812, Florida's theft statute, Section 812.035(5), Florida Statutes (1993).
Plaintiff State of Florida, further seeks an award of restitution and actual damages to all consumers who are shown to have been injured in this action, pursuant to Section 559.813 and Section 501.207, Florida Statutes (1993); an assessment of civil penalties against defendants in the amount of ten thousand dollars ($10,000.00) for each act or practice found to be in violation of Chapter 501, Part II, Florida Statutes (1993), or in violation of the Rules of the Department of Legal Affairs, pursuant to Section 501.2075, Florida Statutes (1993); an assessment of civil penalties against defendants in the amount of five thousand dollars ($5,000) for each act or practice found to be in violation of Chapter 559, Part VIII, Florida Statutes (1993); an award of attorneys' fees and costs to it pursuant to Section 501.2105, Florida Statutes (1993); and such other equitable relief as may be appropriate, including, but not limited to, an ex parte restraining order, a temporary restraining order, and preliminary and permanent injunctive relief.
Unless restrained and enjoined by this Court, defendants are likely to and will continue to engage in the acts and practices alleged in this Complaint and in similar acts and practices as more fully described below.
II.
JURISDICTION AND VENUE
This Court has jurisdiction over the subject matter of this Complaint pursuant to Sections 6c and 6d of the Act, 7 U.S.C. 13a-1, 13a-2. Section 6c of the Act, 7 U.S.C. 13a-1, authorizes the Commission to seek injunctive relief in the district courts of the United States against any person when it appears to the Commission that such person has engaged, is engaging, or is about to engage in any act or practice constituting a violation of any provision of the Act or any rule, regulation or order issued thereunder. Section 6d of the Act, 7 U.S.C. 13a-2, authorizes any state to seek injunctive relief in the district courts of the United States against any person when it appears to the Attorney General of that state that the interests of the residents of that state have been, are being, or may be threatened or adversely affected because any person has engaged, is engaged, or is about to engage in any act or practice constituting a violation of any provision of the Act or any rule, regulation or order of the Commission issued thereunder.
The Court has jurisdiction over the violations of state law alleged in Counts V, VI, VII, and VIII of this Complaint under the doctrine of pendant jurisdiction and pursuant to Section 12(e)(3) of the Act, 7 U.S.C. 16(e)(3), which provides that nothing in the Act shall supersede or preempt the application of any Federal or State statute, including any rule or regulation thereunder, to any person required to be registered or designated under the Act who shall fail or refuse to obtain such registration or designation.
Venue properly lies with this Court pursuant to Section 6c and 6d of the Act, 7 U.S.C. 13a-1, 13a-2, in that defendants are found in, inhabit, or transact business in this district, and the acts and practices in violation of the Act and the Commission's Regulations have occurred within this district, among other places.
III.
THE PARTIES
A.Plaintiffs
The Commodity Futures Trading Commission, an independent federal regulatory agency, was formed on April 21, 1975, and is empowered to administer and enforce the provisions of the Act, 7 U.S.C. 1 et seq., and the Commission's Regulations promulgated thereunder, 17 C.F.R. 1 et seq. The Commission has its principal office at Three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581.
The State of Florida is a sovereign state of the United States. The State of Florida, Department of Legal Affairs, brings this action by and through, Robert A. Butterworth, its Attorney General, acting within the scope of his official duties under the authority granted to him under Article IV, Section 4, Florida Constitution, Section 16.01, Florida Statutes (1993), and Florida common law. The Florida statutory violations alleged herein occurred in or affect more than one judicial circuit in the State of Florida. The State of Florida has conducted an investigation and the Attorney General, Robert A. Butterworth, has determined that an enforcement action serves the public interest.
B.Defendants
JDI Limited Inc. d/b/a Future Vision ("Future Vision") is a Florida corporation formerly located at 600 Corporate Drive, Suite 150, Fort Lauderdale, Florida 33334. Future Vision has never been registered with the Commission in any capacity.
Richard A. Bandemer ("Bandemer") resides at 5856 Windrift Lane, Boca Raton, Florida 33433. Bandemer and his wife, Eileen Bandemer, are listed as Directors of Future Vision. Bandemer has never been registered with the Commission in any capacity.
Frederick W. Taft ("Taft") resides at 801 S.E. 16th Court, Unit #10, Fort Lauderdale, Florida 33316. Taft was employed by Future Vision from at least March 1994 to November 1994. In 1992, Taft was convicted of money laundering and sentenced to 21 months in prison by the United States District Court for the Eastern District of Pennsylvania. [United States of America v. Frederick Taft, Case No. 92-0373-01 (E.D. Pa. Oct. 14, 1992).] He was released from prison in November 1993 and remains on probation through May 1997. He has never been registered with the Commission in any capacity.
Oster Communications Inc. d/b/a Future Source had a principal place of business at 955 Parkview Blvd., Lombard, Illinois. Until September 13, 1995, and during the period of time relevant to this complaint, "Future Source" was an unincorporated division of Oster Communications Inc., an Illinois corporation with a principal place of business at 219 Parkade, Cedar Falls, Iowa. Oster Communications Inc. is authorized as a foreign corporation to do business in the State of Florida as Future Source. Oster Communications Inc. was registered with the Commission as a commodity trading advisor from June 1982 to June 1990. Future Source has never been registered with the Commission in any capacity.
Future Source Information Systems Inc. is an Illinois corporation with a principal place of business at 955 Parkview Blvd., Lombard, Illinois. Future Source Information Systems Inc. was formerly the unincorporated division of Oster Communications Inc. known as Future Source. Oster Communications Inc. established Future Source as a separate corporate entity on September 13, 1995. [Hereinafter Oster Communications Inc. d/b/a Future Source and Future Source Information Systems Inc. will be collectively referred to as defendant "Oster"].
IV.
DEFENDANTS' BUSINESS OPERATIONS
From at least February 1994 until March 1995, or at various times during such period, defendants Future Vision, Bandemer, and Taft solicited members of the general public to purchase a computerized commodity futures trading program called the "Micro-Trading System." The Micro-Trading System analyzed historical and real-time market data supplied by Oster, an Illinois based quote service, and generated various technical indicators which were displayed on twenty computer screens. Customers who purchased the Micro-Trading System from defendants were provided with a personal computer that contained Future Vision's proprietary software. Defendants Future Vision, Bandemer, and Taft informed actual and prospective customers that the technical indicators generated by the Micro-Trading System would show them the direction of the Swiss Franc futures market, and indicate when and where to enter and exit the market and when to buy and when to sell Swiss Franc futures contracts.
At all relevant times, defendants Future Vision, Bandemer, and Taft solicited members of the general public to purchase the Micro-Trading System by advertising in the print medium including, but not limited to, the business opportunities sections of the Miami Herald and the Sun Sentinel, and by calling individuals responding to such advertisements. In addition, defendants Future Vision, Bandemer, and Taft conducted demonstrations of the Micro-Trading System at various business and franchise expositions.
In the course of soliciting prospective customers to purchase the Micro-Trading System and training actual customers to use the system, defendants Future Vision, Bandemer, and Taft routinely misrepresented material facts, or omitted material facts, in connection with the trading of commodity futures contracts. These misrepresentations and omissions concerned, among other things: (a) the profitability of the Micro-Trading System; (b) the risk of loss; and (c) the trading record and success of defendants and actual customers.
As part of their solicitations, defendants Future Vision, Bandemer, and Taft misrepresented to prospective customers that they would consistently make profitable trades in the Swiss Franc futures market by relying on the Micro-Trading System. Specifically, in one print advertisement, defendants guaranteed that their Micro-Trading System would yield an average of $625 in profits before noon each day. During telephone calls responding to customer inquiries and in a promotional brochure on the Micro-Trading System, defendants Future Vision, Bandemer, and Taft falsely assured customers that they would be able to make on each short-term trade at least $1,250 in profits by using the Micro-Trading System, and that there were usually an average of two to four such investment opportunities a day before noon, providing a potential $2,500 per day profit.
Individuals responding to defendants' advertisements were encouraged to attend demonstrations at Future Vision's office suite to learn more about the Micro-Trading System. During these demonstrations, defendants Bandemer and Taft led prospective customers to believe that there was little risk of loss; they guaranteed prospective investors that by following the Micro-Trading System, 80% of trades would be profitable and only 20% of trades would result in losses.
Defendants Bandemer and Taft represented to prospective customers that all or the vast majority of the actual purchasers of the Micro-Trading System were using the system successfully and reaping profits. Defendants Bandemer and Taft also represented to prospective customers during demonstrations that they had made hundreds of thousands of dollars in profits over each of the past two to three years by using the Micro-Trading System to trade in individual and/or proprietary accounts, when in fact they knew such representations were not true or had no reasonable basis in fact.
The plaintiffs have located 123 trading accounts opened by Future Vision customers. Contrary to defendants' representations regarding the success rate of actual purchasers of the Micro-Trading System, trading statements for these accounts reveal that 109 or 89% of these Future Vision account holders had net trading losses as of October 31, 1994. They further reveal that as of October 31, 1994, these accounts had gross trading losses of approximately $548,992.16 and gross trading profits of approximately $12,956.47, resulting in an overall trading loss of approximately $536,035.69.
Plaintiffs have uncovered two trading accounts maintained by Bandemer and his wife at First Commercial Financial Group Inc. ("First Commercial"), and one trading account in the name of JDI Limited Inc. ("JDI") at Shatkin, Arbor, Karlov & Co. ("Shatkin"). Contrary to defendants' representations regarding their own success with the Micro-Trading System, these accounts have sustained overall trading losses. One First Commercial account was opened on August 17, 1992, and sustained $11,112.10 in net trading losses between that date and October 31, 1994. The second account at First Commercial sustained $14,389.80 in net trading losses from April 5, 1993, the date the account was opened, to October 31, 1994. The JDI account at Shatkin was opened by Bandemer on April 13, 1994, and had net trading losses of approximately $31,345.80, as of October 31, 1994.
To purchase the Micro-Trading System, customers were required to execute an Agreement for Licensing of Propriety Rights ("Licensing Agreement") with Future Vision. Pursuant to the terms of the Licensing Agreement, the total cost of the Micro-Trading System was $75,000. Customers were required typically to pay $15,000 up front; additionally, they agreed to pay Future Vision ten percent of their profits each month, or $5,000, whichever was less, until the balance was paid. Despite the fact that the overwhelming majority of customers using the Micro-Trading System incurred losses using the system, defendants falsely assured prospective customers that they would easily make significant profits which would allow them to pay the $60,000 balance for the Micro-Trading System.
In return, customers received a personal computer containing the Micro-Trading System. They also received a five- day training course and ongoing advice from Bandemer and Taft.
During the five-day training seminar, customers were told that although the Micro-Trading System was adaptable for trading in other markets, namely Deutsche Mark and S&P futures, the system was designed specifically for micro-trading in Swiss Franc futures. During these sessions, defendants Bandemer and Taft provided customers with a written training manual and together represented to customers that the technical indicators contained on the various charts and graphs would pinpoint the direction the Swiss Franc market was moving, and would indicate at what points to enter and exit the Swiss Franc futures market and at what points to buy and sell Swiss Franc futures contracts.
During the training seminar, defendants Bandemer and Taft repeatedly falsely assured customers that by using the Micro-Trading System, 80% of their trades would be profitable. They also reaffirmed during the training sessions that all or the vast majority of prior "graduates" had made and were continuing to make large profits by using the Micro-Trading System and that they had made hundreds of thousands of dollars in profits by using the system to trade for individual or proprietary accounts over the previous two to three years. Defendants Bandemer and Taft made each of these representations when in fact they, as well as the vast majority of Future Vision customers, had suffered net losses using the Micro-Trading System.
Pursuant to the Licensing Agreement, after completing the five-day training course, purchasers of the Micro-Trading System received ongoing trading advice from defendants Future Vision, Bandemer, and Taft. This ongoing advice included, but was not limited to, daily critiques of their faxed trades by Bandemer and Taft, refresher and remedial follow-up courses, and access to daily voice-mail messages left by Bandemer and/or Taft recounting the specific Swiss Franc futures trades which customers should have made the previous day based on the technical indicators generated by the Micro-Trading System, upcoming economic reports which might have affected the Swiss Franc market, and, in some instances, actual trades made by Bandemer and Taft based on the Micro-Trading System's indicators.
In some instances, defendants Future Vision, Bandemer, and Taft provided customers with direct assistance in executing Swiss Franc futures trades using the Micro-Trading System. Customers asked Bandemer and/or Taft questions about an ongoing trade and were told to either exit the market immediately to avoid further losses or to enter a market immediately to take advantage of a purported profitable market movement.
From at least February 1, 1994 to March 1995, Future Vision entered into Licensing Agreements with at least 125 customers for the purchase of the Micro-Trading System. Based on the $15,000 down-payment cost, defendants collected at least $2 million from customers during that time.
Defendant Oster develops and leases computer software systems for trading futures and options contracts. Oster also provides customers with access to market price data.
Pursuant to agreement and by course of conduct, Oster acted as the sole supplier of analytical software and quote services to defendants and their customers between approximately September 1991 and March 1995, or at various times during that period.
Pursuant to its agreement and course of conduct with Bandemer and Future Vision, defendant Oster provided hardware, software, and quote services at no cost. Defendant Oster also agreed to pay Future Vision a commission for each person who purchased the Micro-Trading System.
"Future Source Technical" is a graphical software created by Oster that allows users to design up to twenty computer screens. Using this software, defendant Bandemer designed a set of twenty customized screens for trading Swiss Franc futures. Bandemer's customized screens displayed seven technical, or mathematical, studies in chart form for periods of time ranging from one to sixty minutes in accordance with his short-term or micro-trading system. Bandemer's customized screens were supplied to customers as part of the Micro-Trading System and, during training, customers were instructed when the displayed studies signaled them to enter and exit the Swiss Franc market, and when to buy and sell contracts.
Bandemer's customized screens could not be programmed and displayed without the underlying Future Source Technical software. Further, to trade with the screens, customers had to obtain market prices from Oster because Oster's electronic price service was the only means of receiving prices compatible with its Future Source Technical software. Hence, a customer who wanted to trade Swiss Franc futures using the Micro-Trading System also had to obtain the Future Source Technical software and prices supplied by defendant Oster.
Oster holds a copyright on the Future Source Technical software. Defendant Future Vision required each customer to execute a lease agreement with Oster at the same time he or she signed the Future Vision Licensing Agreement to purchase the Micro-Trading System. Future Vision distributed and collected the lease agreements on behalf of Oster. Under the terms of the lease agreement, customers agreed to pay defendant Oster a monthly fee for the use of the Future Source Technical software and for the supply of market price quotes. The lease agreement expressly provided that ownership of the software was retained by defendant Oster and had to be promptly returned to Oster at the expiration of the lease.
Defendants Bandemer and Future Vision brought more than 125 customers to Oster between September 1991 and March 1995. Pursuant to its agreement and course of conduct with Bandemer and Future Vision, defendant Oster collected at least $600,000 in fees and charges from Bandemer, Future Vision, and defendants' customers.
In addition to the lease agreements, defendant Future Vision distributed and collected credit applications on behalf of Oster. Oster reviewed the credit applications and had the right to reject or require additional security of any customer seeking to purchase the Micro-Trading System whom it perceived as a credit risk. Defendant Oster further retained the right to terminate its services in the event that a customer breached the lease agreement.
Defendant Future Vision also collected up-front fees owed to Oster by customers under the lease agreement. Of the $15,000 typically paid by each customer to Future Vision prior to training, Future Vision remitted $650 to defendant Oster for installation costs and $500 as a security deposit. In some instances, defendant Future Vision also paid customers' fees for the first month of service.
Shortly after Future Vision began doing business, defendant Oster agreed to cap and pool the total amount of security deposits paid by Future Vision on behalf of its customers so that Future Vision could use the funds it retained to pay marketing expenses. Defendant Bandemer executed a deposit rider attached to each Future Source Agreement that permitted Oster to withdraw funds from the security pool in the event of a customer default. Future Vision was required to maintain a specified amount of funds in the security pool at all times.
Defendants Future Vision, Bandemer, and Taft led customers to believe that Oster and Future Vision were jointly marketing the Micro-Trading System. Defendants told customers that Bandemer's customized trading screens were a modified version of the Future Source Technical software. Defendants also told customers that Future Vision was a beta test site for Oster. Defendants further told customers that they could not purchase the Micro-Trading System unless they leased the Oster software and paid Oster to receive market prices.
Defendant Oster joined Future Vision in the sale and support of the Micro-Trading System. Defendant Future Vision attended at least three business conventions where it demonstrated the Micro-Trading System to prospective customers. Oster employees distributed promotional materials regarding the Micro-Trading System and collected the names and addresses of prospective customers. Oster technicians also installed the equipment and software for these demonstrations.
Oster personnel assisted defendant Future Vision with the physical set-up and dismantling of computer equipment used by customers during training. They also installed the requisite Future Source Technical software and hardware for price access in each computer prior to every training class. On at least one occasion, defendant Oster also supplied Future Vision with a classroom to conduct training. In or about July 1994, defendant Oster arranged for Future Vision to use building space adjacent to its own office at no cost. Prior to class, customers were sent letters stating that training would be conducted at Oster's regional office.
By at least mid 1994, Oster technicians were installing a computer program containing defendant Bandemer's customized trading screens at Future Vision in addition to the Future Source Technical software. Oster assisted Future Vision in making various modifications to the program, including changes to make it compatible with Oster's Windows based software. Defendant Oster also explored means for protecting and securing the Future Vision program.
During each five-day training seminar conducted at Future Vision, defendants Bandemer and Taft taught customers how to access and use Oster's Future Source Technical software, as well as how to trade with the Micro-Trading System. They also distributed Oster's Future Source Technical Guide to Operations along with the Future Vision training manual. Additional Oster materials were incorporated in the Future Vision training manual.
At least one Oster employee gave an oral presentation to almost every training class held at Future Vision. During these presentations, the Oster employee told customers that Oster and Future Vision were jointly marketing the Micro-Trading System. The Oster employee discussed both the Micro-Trading System and the Future Source Technical software. In some instances, the Oster employee endorsed the Micro-Trading System. The Oster employee also told customers that Oster was available to assist them with their trading.
Defendant Oster provided ongoing support to purchasers of the Micro-Trading System after they completed training at Future Vision. Its technicians handled numerous service calls and reinstalled Future Vision's customized software when necessary. Oster staff also assisted customers by telephone and in person with using both the Future Source Technical and Future Vision software programs.
V.
FEDERAL STATUTORY AND REGULATORY REQUIREMENTS
Section 1a(5)(A) of the Act, 7 U.S.C. 1, provides in relevant part that a commodity trading advisor ("CTA") is any person who, for compensation or profit, engages in the business of advising others, either directly or through publications, writings, or electronic media, as to the value of or the advisability of trading in any contract of sale of a commodity for future delivery made or to be made on or subject to the rules of a contract market or who, for compensation or profit as part of a regular business, issues or promulgates analyses or reports concerning such activities. With certain specified exceptions and exemptions not relevant in this case, all CTAs are required to be registered with the Commission pursuant to Section 4m(1) of the Act, 7 U.S.C. 6m(1).
Section 4b(a) of the Act, 7 U.S.C. 6b(a), prohibits all fraudulent activity in connection with any order to make, or the making of, any contract of sale of any commodity in interstate commerce, made, or to be made, on or subject to the rules of any contract market, for or on behalf of any other person. Section 4b(a)(i) of the Act makes it unlawful for any person to cheat or defraud or attempt to cheat or defraud any other person in connection with an order to make, or the making of, any commodity futures contract.
Section 4m(1) of the Act, 7 U.S.C. 6m(1), makes it unlawful for any CTA, unless registered with the Commission, to make use of the mails or any means or instrumentality of interstate commerce in connection with his business as a CTA. Section 4m(1) of the Act provides that, with certain specified exceptions and exemptions not relevant in this case, all CTAs are required to be registered with the Commission.
Sections 4o(1)(A) and (B) of the Act, 7 U.S.C. 6o (1)(A)-(B), make it unlawful for any CTA, whether registered, required to be registered, or exempt from registration, by use of the mails or any means of instrumentality of interstate commerce, directly or indirectly, to employ any device, scheme, or artifice to defraud any client or prospective client or participant, or to engage in any transaction, practice or course of business which operates as a fraud or deceit upon any client or participant or prospective client or participant.
Subsections (1) and (2) of Regulation 4.41(a), 17 C.F.R. 4.41(a)(1)-(2), prohibit a CTA from advertising in a manner which employs any device, scheme, or artifice to defraud any client or prospective client, or in any manner that involves any transaction, practice or course of business which operates as a fraud or deceit upon any actual or prospective client. The prohibition of Section 4.41 applies to any publication, distribution, or broadcast of any report, letter, circular, memorandum, publication, writing, advertisement, or other literature or advice. 17 C.F.R. 4.41(c)(1).
Section 2(a)(1)(A)(iii) of the Act, 7 U.S.C. 4, provides that the act, omission, or failure of any official, agent, or other person acting for any individual, association, partnership, corporation, or trust within the scope of his employment or office shall be deemed the act, omission, or failure of such individual, association, partnership, corporation, or trust, as well as of such official, agent, or other person.
Section 13(a) of the Act, 7 U.S.C. 13c, provides that any person who commits, or who willfully aids, abets, counsels, commands, induces, or procures the commission of, a violation of any of the provisions of the Act, or any of the rules, regulations or orders issued pursuant to the Act, or who acts in combination or concert with any person in any such violation, or who willfully causes an act to be done or omitted which if directly performed or omitted by him or another would be a violation of the provisions of the Act or any such rules, regulations, or order may be held responsible for such violation as a principal.
Section 13(b) of the Act, 7 U.S.C. 13c, provides that any person who, directly or indirectly, controls any person who has violated any provision of the Act or any of the rules, regulations, or orders issued pursuant to the Act may be held liable for such violation to the same extent as such controlled person.
VI.
VIOLATIONS OF THE COMMODITY EXCHANGE ACT
AND REGULATIONS THEREUNDER
COUNT I
VIOLATIONS OF SECTION 4b(a)(i) OF THE ACT, 7 U.S.C. 6b(a)(i): FRAUD IN CONNECTION WITH THE SOLICITATION OF COMMODITY FUTURES ACCOUNTS
The allegations contained in paragraphs 1 through 57 above are hereby realleged and incorporated herein by reference. From at least February 1994 to March 1995, or at various times during such period, defendants Future Vision, Bandemer, and Taft, in or in connection with orders to make, or the making of contracts of sale of commodities for future delivery, made, or to be made, for or on behalf of other persons where such contracts were or could have been used for (a) hedging any transaction in interstate commerce in such commodities, or (b) determining the price basis of any transaction in interstate commerce in such commodities, or (c) delivering any such commodities sold, shipped or received in interstate commerce for the fulfillment thereof, cheated, defrauded, or deceived, or attempted to cheat, defraud, or deceive, other persons by making false, deceptive, or misleading oral representations of material fact during the course of soliciting commodity futures customers and by omitting or failing to disclose material facts during the course of soliciting commodity futures customers, including, but not limited to, the following material misrepresentations and omissions alleged in paragraphs 60 through 62 below.
Misrepresentations and Omissions Concerning
the Likelihood of Profits
Defendants Future Vision, Bandemer, and Taft made false, deceptive, or misleading oral and written representations of material fact, or omitted material facts, relating to the likelihood of profit from using the Micro-Trading System for purposes of trading commodity futures contracts including, but not limited to, the following:
(a) representing to prospective and actual customers in advertisements and promotional materials that they would realize certain profits from using the Micro- Trading System including, but not limited to, the following:
(i) "Financial Business. Average $625/day before noon from home w/ no employees, no sales, no inventory. YOU can too. No MLM or anything you've ever seen. GUARANTEED. $25K req. 305/938-1177.";
(ii) "CASH MGT. SYSTEM - The surest, safest way to getting rich in America is gradually, easily, day by day. If you are open to new ideas. Come watch how I make $500 right before your eyes in 2- 3 hours. Not MLM or anything you've ever seen before. GUARANTEED! Call 305/938-1177."; and
(iii) "On each investment you can earn as much as $1,250 and there are usually an average of two to four such investment opportunities a day before 12:00 noon. That's a potential $2,500 a day profit! Plus your own Personal Global Trading Station shows you which opportunities these are -- when to buy and when to sell them -- It's just that easy!
(b)representing to prospective and actual customers during oral solicitations and demonstrations and training classes that they would realize certain profits from using the Micro-Trading System to trade Swiss Franc futures contracts including, but not limited to, the following:
(i) that eighty percent of their trades would be winners if they followed the indicators generated by the Micro-Trading System, or that the Future Vision software program, if followed correctly, was accurate 80% of the time, or words to that effect;
(ii) that they would have between eight and fifteen winning trades and between two and four losing trades per week, or that if customers traded Swiss Franc futures according to the exit and entry signals produced by the Micro-Trading system they would make money, or that earnings from their winning trades would be three times as large as the losses from their losing trades, or words to that effect; and
(iii) that if they invested $10,000 in the Swiss Franc market, they would definitely earn $10,000 a month in profits using Future Vision's software program, or that when the program was accurate, profitable trades would return between 10% to 15%, or they could make $1,000 and up a day trading at least ten Swiss Franc futures contracts with the Micro-Trading System, or that they would make a quarter of a million dollars trading ten Swiss Franc futures contracts each business day over the course of a year using their Micro-Trading System; or words to that effect;
when in fact they knew such representations were not true or had no reasonable basis in fact; and
(c)omitting to inform customers that they did not have profitable trades 80% of the time using the Micro- Trading System and that all or the vast majority of their previous purchasers did not have profitable trades 80% of the time using the Micro-Trading System;
when in fact they knew or had a reasonable basis to know that such omissions would materially affect the customer's decision to trade futures using the Micro-Trading System.
Misrepresentations And Omissions Concerning
the Risk of Loss
Defendants Future Vision, Bandemer, and Taft further defrauded prospective and actual customers by making false, deceptive, and/or misleading oral representations of material facts, or by omitting material facts, relating to the risk of loss involved in trading commodity futures contracts based on the Micro-Trading System including, but not limited to, the following:
(a)representing to prospective and actual customers that the risk of loss in commodity futures trading using the Micro-Trading System was minimal and that the risk of loss could be limited or controlled including, but not limited to, the following:
(i) that 80% of their trades would be winners if they followed the indicators generated by the Micro-Trading System, or that earnings from their winning trades would be three times as large as the losses from their losing trades; or that they would have between eight and fifteen winning trades and between two and four losing trades per week, or words to that effect;
(ii) that 20% of a customers trades would be unprofitable, but the customer would lose no more than 10% to 15%, or words to that effect;
when in fact they knew such representations were not true or had no reasonable basis in fact; and
(b)omitting to discuss with customers the risks involved in trading futures using the Micro-Trading System;
when in fact they knew or had a reasonable basis to know that such omissions would materially affect the customer's decision to trade futures using the Micro-Trading System.
Misrepresentations And Omissions Concerning
Trading Record
Defendants Future Vision, Bandemer, and Taft further defrauded prospective and actual customers by making false, deceptive, and/or misleading oral representations of material facts in relation to the trading record of defendants and actual customers including, but not limited to, the following:
(a) representing to prospective and actual customers that defendant Future Vision had been using the Micro- Trading System to trade successfully for a house account for approximately three years;
(b) representing to prospective and actual customers that Future Vision had made approximately $277,000 in profits its best year and approximately $252,000 in profits its worst year using the system; or representing that defendants Bandemer and Taft had made profits of approximately $240,000 in 1991, $250,000 in 1992, and $277,000 in 1993 using the system to trade, or words to that effect; and
(c) representing that all graduates were doing great or making substantial profits, or words to that effect;
when in fact they knew such representations were not true or had no reasonable basis in fact; and
(e) omitting to inform customers that defendants had suffered net losses trading with the Micro-Trading System and that the vast majority of previous purchasers of the Micro-Trading System had suffered net losses trading with the Micro-Trading System;
when in fact they knew or had a reasonable basis to know that such omissions would materially affect the customer's decision to trade futures using the Micro-Trading System.
The foregoing acts, representations, omissions, and assurances made by defendants Future Vision, Bandemer, and Taft occurred in or in connection with orders to make, or the making of, contracts of sale of commodities for future delivery, made, or to be made, for or on behalf of other persons where such contracts were or could have been used for (a) hedging any transaction in interstate commerce in such commodities, or (b) determining the price basis of any transaction in interstate commerce in such commodities, or (c) delivering any such commodities sold, shipped or received in interstate commerce for the fulfillment thereof. Defendants Future Vision, Bandemer, and Taft thereby, cheated, defrauded, or deceived other persons in violation of Section 4b(a)(i) of the Act, 7 U.S.C. 6b(a)(i).
During the period of time relevant to this complaint, defendants Bandemer and Future Vision engaged in the foregoing acts and made the foregoing representations, omissions, and assurances as part of, pursuant to, and within the scope of a joint venture and/or agency relationship with Oster. Oster is therefore liable for the violations of Section 4b(a)(i) committed by Bandemer and Future Vision pursuant to Section 2(a)(1)(A)(iii) of the Act. 7 U.S.C. 4, 6b(a)(i).
During the period of time relevant to this complaint, Oster willfully aided and abetted, and/or acted in combination or concert with defendants Bandemer and Future Vision in their fraudulent sale of the Micro-Trading System, and/or willfully caused defendants to engage in such fraudulent sales. Pursuant to Section 13(a) of the Act, Oster is thereby liable for the violations of Section 4b(a)(i) committed by Bandemer and Future Vision. 7 U.S.C. 6b(a)(i), 13c.
During the time relevant to this complaint, Oster, directly or indirectly, controlled defendants Bandemer and Future Vision, and failed to act in good faith and/or knowingly induced the acts constituting violations of Section 4b(a)(i) of the Act. 7 U.S.C. 6b(a)(i). Defendant Oster is therefore liable for the violations of Section 4b(a)(i) committed by Bandemer and Future Vision pursuant to Section 13(b) of the Act. 7 U.S.C. 6b(a)(i), 13c.
COUNT II
VIOLATIONS OF SECTION 4m(1) OF THE ACT,
7 U.S.C. 6m(1): FUTURE VISION, BANDEMER,
AND TAFT ACTING AS COMMODITY TRADING
ADVISORS WITHOUT BENEFIT OF REGISTRATION
Paragraphs 1 to 66 are realleged and incorporated herein by reference.
From at least February 1994 until the March 1995, or at various times during such period, defendants Future Vision, Bandemer, and Taft acted as CTAs in that defendants, for compensation or profit, engaged in the business of advising others, either directly or through publications, writings, or electronic media, as to the value of or the advisability of trading in any contract of sale of a commodity for future delivery made or to be made on or subject to the rules of a contract market or, for compensation or profit as part of a regular business, issued or promulgated analyses or reports concerning such activities. At all relevant times, defendants Future Vision, Bandemer, and Taft used the mails or other means or instrumentalities of interstate commerce, directly or indirectly, to engage in the business of CTAs, without being registered with the Commission, in violation of Section 4m(1) of the Act, 7 U.S.C. 6m(1).
During the period of time relevant to this complaint, defendants Bandemer and Future Vision engaged in their CTA operations as part of, pursuant to, and within the scope of a joint venture and/or agency relationship with Oster. Defendant Oster is therefore liable for defendants failure to register as CTAs pursuant to Section 2(a)(1)(A)(iii) of the Act. 7 U.S.C. 4, 6m(1).
During the period of time relevant to this complaint, Oster willfully aided and abetted, and/or acted in combination or concert with Bandemer and Future Vision in their CTA operations, and/or willfully caused defendants to engage in such unregistered activities. Pursuant to Section 13(a) of the Act, defendant Oster is thereby liable for defendants failure to register as CTAs. 7 U.S.C. 6m(1), 13c.
During the time relevant to this complaint, Oster, directly or indirectly, controlled defendants Bandemer and Future Vision, and failed to act in good faith and/or knowingly induced the acts constituting violations of Section 4m(1) of the Act. 7 U.S.C. 6m(1). Defendant Oster is therefore liable for the failure of Bandemer and Future Vision to register as CTAs pursuant to Section 13(b) of the Act. 7 U.S.C. 6m(1), 13c.
COUNT III
VIOLATIONS OF SECTIONS 4o(1)(A)-(B) OF THE ACT, 7 U.S.C. 6o (1)(A)-(B), AND SUBSECTIONS (1) and (2) OF COMMISSION REGULATION 4.41(a), 17 C.F.R. 4.41(a)(1)- (2) (1994): FRAUDULENT ADVERTISING AND SALES PRACTICES
The allegations contained in paragraphs 1 through 71 above are realleged and incorporated herein by reference.
From at least February 1994 until March 1995, or at various times during such period, defendants Future Vision, Bandemer, and Taft, by use of the mails or other means or instrumentalities of interstate commerce, directly or indirectly, employed devices, schemes or artifices to defraud clients or prospective clients, and engaged in transactions, practices, or courses of business which operated as a fraud or deceit upon clients or prospective clients, by engaging in fraudulent sales practices and fraudulent advertising in connection with their acting as CTAs without registering as such with the Commission, in violation of Sections 4o(1)(A)-(B) of the Act, 7 U.S.C. 6o(1)(A)-(B), and subsections (1) and (2) of Regulation 4.41(a), 17 C.F.R. 4.41(a)(1)-(2), as set forth above, including, but not limited to, the following:
(a) misrepresenting to actual and prospective customers that profits were assured and that the risk of loss was minimal in trading commodity futures contracts based on Future Vision's trading system; and
(b) misrepresenting through advertising in the print media that profits were assured in trading commodity futures contracts based on Future Vision's Micro- Trading System.
During the period of time relevant to this complaint, defendants Bandemer and Future Vision engaged in the foregoing fraudulent sales practices in connection with their CTA operations as part of, pursuant to, and within the scope of a joint venture and/or agency relationship with Oster. Defendant Oster is therefore liable for defendants fraudulent acts and practices pursuant to Section 2(a)(1)(A)(iii) of the Act. 7 U.S.C. 4, 6o(1)(A),(B); 17 C.F.R. 4.41(a)(1),(2).
During the period of time relevant to this complaint, Oster willfully aided and abetted, and/or acted in combination or concert with Bandemer and Future Vision in their fraudulent CTA operations, and/or willfully caused defendants to engage in such fraudulent activities. Defendant Oster is therefore liable for defendants fraudulent acts and practices pursuant to Section 13(a) of the Act. 7 U.S.C. 6o(1)(A),(B), 13c; 17 C.F.R. 4.41(a)(1),(2).
During the time relevant to this complaint, Oster, directly or indirectly, controlled defendants Bandemer and Future Vision, and failed to act in good faith and/or knowingly induced the acts constituting violations of Sections 4o(1)-(B) of the Act and Commission Regulations 4.41(a)(1)-(2). 7 U.S.C. 6o(1)(A),(B); 17 C.F.R. 4.41(a)(1),(2). Defendant Oster is therefore liable for the fraudulent acts and practices committed by Bandemer and Future Vision pursuant to Section 13(b) of the Act. 7 U.S.C. 6o(1)(A),(B), 13c; 17 C.F.R. 4.41(a)(1),(2).
COUNT IV
VIOLATION OF SECTION 4m(1) OF THE ACT,
7 U.S.C. 6m(1): OSTER ACTING AS A
COMMODITY TRADING ADVISOR WITHOUT BENEFIT
OF REGISTRATION
Paragraphs 1 to 76 are realleged and incorporated herein by reference.
From at least February 1994 until March 1995, or at various times during such period, Oster acted as a CTA in that defendant, for compensation or profit, engaged in the business of advising others, either directly or through publications, writings, or electronic media, as to the value of or the advisability of trading in any contract of sale of a commodity for future delivery made or to be made on or subject to the rules of a contract market or, for compensation or profit as part of a regular business, issued or promulgated analyses or reports concerning such activities. At all relevant times, defendant Oster used the mails or other means or instrumentalities of interstate commerce, directly or indirectly, to engage in business as a CTA, without being registered with the Commission, in violation of Section 4m(1) of the Act, 7 U.S.C. 6m(1).
VII.
VIOLATIONS OF FLORIDA LAW
COUNT V
VIOLATION OF FLORIDA'S DECEPTIVE AND UNFAIR
TRADE PRACTICES ACT BY DEFENDANTS
FUTURE VISION, BANDEMER, AND TAFT
State of Florida adopts, incorporates herein, and realleges paragraphs 1-78 as if fully set forth below.
The Florida Department of Legal Affairs is the enforcing authority of Florida's Deceptive and Unfair Trade Practices Act as defined in Chapter 501, Part II, Florida Statutes (1993), and is authorized to seek damages, injunctive and other statutory relief pursuant to this part.
Chapter 501.204(1), Florida Statutes (1993), declares unfair or deceptive acts or practices in the conduct of any trade or commerce to be unlawful.
Section 501.204, Florida Statutes (1993), and Chapter 2-9, Florida Administrative Code (F.A.C.), set forth the rules of the Department of Legal Affairs pertaining to advertising and sales of goods or services.
Defendants Future Vision, Bandemer, and Taft have violated the provisions of Chapter 2-9, F.A.C., including, but not limited to, those subsections specifically delineated herein.
Section 2-9.002(3), F.A.C., declares it an unfair or deceptive act or practice to misrepresent the endorsement or approval of goods or services.
Section 2-9.002(5), F.A.C., declares it an unfair or deceptive act or practice to misrepresent the nature, characteristics, benefits, warranties, guarantees, or qualities of goods or services.
The representations of defendants Future Vision, Bandemer, and Taft, as set forth in paragraphs 20, 23, 29, and 62, materially misrepresented the endorsement or approval of the goods and services offered by defendants in violation of Section 2-9.002(3), F.A.C.
Defendants representations as set forth in paragraphs 18, 20-22, 26, 28-30, and 60-62, materially misrepresented the nature, characteristics, benefits, warranties, guarantees, or qualities of goods or services offered by the defendants in violation of Section 2-9.002(5), F.A.C.
Section 501.204, Florida Statutes (1993), and Chapter 2-18, Florida Administrative Code (F.A.C.), sets forth the rules of the Department of Legal Affairs pertaining to Contracts for Future Services.
The Licensing Agreement executed by defendants' customers is a "contract for future services" as that term is defined in Section 2-18.001(1), F.A.C.
Defendants have violated the provisions of Chapter 2- 18, F.A.C., including, but not limited to, those subsections specifically delineated herein.
Section 2-18.002, F.A.C. declares it an unfair or deceptive act or practice for the seller of future consumer services to fail to furnish the buyer with a statement of the consumer's right of cancellation.
Defendants' conduct of failing to furnish the consumer with a statement of the consumer's right of cancellation is in violation of Section 2-18.002, F.A.C.
Section 2-18.008, F.A.C. declares it an unfair or deceptive act or practice for the seller of future consumer services to misrepresent the nature, or efficacy, of its courses, training devices, methods or equipment or the number, qualifications, training or experience of its personnel.
Defendants have made certain representations regarding the training and qualifications of its personnel, and the nature or efficacy of its courses, including, but not limited to, the following:
Future Vision is the brainchild and creation of several experienced professionals from a variety of specialized fields. IBM computer specialists and technicians, software programming experts, commodity trading analysts, stockbroker futures experts, technical chart analysts, financial leveraging wizards, mathematical scientists and chaos theory specialists are all part of the hard working team that helped create Future Vision.
Future Vision is the only company in the entire world with Formula N2P and are the only instructors in the world authorized and capable of teaching the Micro- Trading System and employing the N2P formula.
The N2P formula and Micro-Trading system were created, developed, copywritten and trademarked by the experts, only at Future Vision.
Continual updates, advanced educational training seminars and completion of all Micro-Trading extension courses are mandatory requirements for every trained instructor at Future Vision.
Section 2-18.010 declares it an unfair or deceptive act or practice to induce a consumer to enter into a contract for future consumer services in reliance upon any false, fraudulent or misleading information, representation, notice or advertisement.
Defendants representations as set forth in paragraphs 18, 20-22, 26, 28-30, and 60-62, materially misrepresented the nature and benefits of the services offered by defendants and fraudulently induced consumers to purchase such services in violation of Section 2-18.010, F.A.C.
The acts and practices of the defendants, as alleged above, have been and presently are injuring and prejudicing the public and defendants' competitors and constitute deceptive and unfair acts and practices and unfair methods of competition, within the intent and meaning of the Florida Deceptive and Unfair Trade Practices Act.
Unless defendants are temporarily and permanently enjoined from engaging further in the acts and practices herein complained, their continued activities will result in immediate and irreparable injury to the unwary, consuming public, for which there is no adequate remedy at law.
COUNT VI
VIOLATION OF FLORIDA'S DECEPTIVE AND UNFAIR
TRADE PRACTICES ACT BY DEFENDANT OSTER
State of Florida adopts, incorporates herein, and realleges paragraphs 1-98 as if fully set forth below.
Defendant Oster had knowledge of and substantially participated in defendants Future Vision and Bandemer's deceptive and unfair trade practices alleged herein.
During the period of time relative to this complaint, Future Vision and Bandemer acted as agents for Oster, and the misrepresentations and omissions made by Future Vision and Bandemer concerning the likelihood of profits, risk of loss, and defendants' trading record were made within the scope of that agency.
During the period of time relative to this complaint, Oster willfully aided and abetted and/or acted in combination or concert with Future Vision and Bandemer in its deceptive and unfair trade practices in the course of selling the Micro-Trading System.
The Future Source Agreement executed by defendants' customers is a "contract for future services" as that term is defined in Section 2-18.001(1). F.A.C.
Defendant Oster has violated the provisions of Chapter 2-18, F.A.C., including but not limited to, those subsections specifically delineated herein.
Section 2-18.002, F.A.C. declares it an unfair or deceptive act or practice for the seller of future consumer services to fail to furnish the buyer with a statement of the consumer's right of cancellation.
Oster's conduct of failing to furnish the consumer with a statement of the consumer's right of cancellation is in violation of Section 2-18.002, F.A.C.
The acts and practices of Oster, as alleged above, have been and presently are injuring and prejudicing the public and defendants' competitors and constitute deceptive and unfair acts and practices and unfair methods of competition, within the intent and meaning of the Florida Deceptive and Unfair Trade Practices Act.
Unless defendants are temporarily and permanent enjoined from engaging further in the acts and practices herein complained, their continued activities will result in immediate and irreparable injury to the unwary, consuming public, for which there is no adequate remedy at law.
COUNT VII
VIOLATION OF FLORIDA'S SALE OF BUSINESS
OPPORTUNITIES ACT BY DEFENDANTS FUTURE
FUTURE VISION, BANDEMER AND TAFT
State of Florida adopts, incorporates herein, and realleges paragraphs 1-108 as if fully set forth below.
Plaintiff is authorized under Florida's Sale of Business Opportunities Act, Chapter 559, Part VIII, Florida Statutes (1993), to seek injunctive relief and other statutory and civil relief pursuant to Section 559.813, Florida Statutes (1993).
Defendants Future Vision, Bandemer, and Taft in the course of their business, have been engaged in the sale of business opportunities within the definition of Section 559.801(1), Florida Statutes (1993).
Defendants have failed to file a truthful and complete disclosure statement as required in Section 559.803 Florida Statutes (1993). The disclosure statement filed by defendants misrepresents the identity of those people charged with the responsibility for its business activities, as required by Section 559.803(2), Florida Statutes (1993). Furthermore, by failing to identify FREDERICK TAFT as one of the persons in charge of Future Vision, the disclosure statement is incomplete since it does not include the fact that one of the persons in charge of Future Vision is a convicted felon, as required by Section 559.803(11), Florida Statutes (1993).
Defendants have further violated Florida's Sale of Business Opportunities Act, by committing the prohibited acts set forth in Section 559.809, Florida Statutes (1993), including but not limited to, making those representations set out in paragraphs 18, 20-22, 26, 28-30, and 60-62.
Unless defendants are temporarily and permanently enjoined from engaging further in the acts and practices herein complained, their continued activities will result in irreparable injury to the unwary, consuming public, for which there is no adequate remedy at law.
COUNT VIII
CIVIL THEFT BY DEFENDANTS FUTURE
VISION, BANDEMER, AND TAFT
State of Florida adopts, incorporates herein and realleges paragraphs 1-114 as if fully set forth below.
Defendants knowingly obtained money from consumers by charging them for services which were never provided and knowingly failed to or refused to return, refund or compensate consumers for charging them for services which were never provided.
Defendants Future Vision, Bandemer, and Taft knowingly obtained consumers' money with the intent to permanently deprive said consumers of their rights to the money and appropriated such money for their own use, and as such their actions amount to civil theft as defined in Section 812.014(1), Florida Statutes (1993).
As a proximate result of the above defendants' actions, consumers have suffered damages as alleged above.
Pursuant to Section 501.213(1), Florida Statutes, (1993), State of Florida, acting on behalf of consumers affected herein, is entitled to civil remedies for theft against defendants as provided in Section 812.035, Florida Statutes (1993).
Unless the above defendants are temporarily and permanently enjoined from engaging further in the acts and practices herein alleged, the continued activities of defendants will result in immediate and permanent irreparable injury to the consuming public in violation of Section 812.014, Florida Statutes (1993).
VII.
REQUEST FOR RELIEF
WHEREFORE, plaintiffs respectfully request that this Court enter:
(a) Orders of preliminary and permanent injunctions, restraining and enjoining defendants and their, agents, servants, employees, successors, assigns, attorneys, and persons in active concert or participation with them who receive actual notice of this order by personal service or otherwise, from directly or indirectly:
(1)operating as CTAs while engaged in the business of advising others, either directly or indirectly or through publications, writings, or electronic media, as to the value of or the advisability of trading in a contract of sale of a commodity for future delivery made on or subject to the rules of any contract market, or receiving compensation or profit for issuing or promulgating analyses or reports concerning trading in commodities without being registered with the Commission as a CTA, in violation of Section 4m(1) of the Act, 7 U.S.C. 6m(1);
(2)in or in connection with any order to make, or the making of, any contract of sale or any commodity for future delivery, made, or to be made, for or on behalf of any other person if such contract for future delivery is or can be used for (a) hedging any transaction in interstate commerce in such commodity or the products or by-products thereof, or (b) determining the price basis of any transaction in interstate commerce in such commodity, or (c) delivering any such commodity sold, shipped, received in interstate commerce for the fulfillment thereof, and/or in connection with any offer to enter into, the entry into, or the confirmation of the execution of any commodity futures transaction, cheating or defrauding or attempting to cheat or defraud such other person in violation of Section 4b(a)(i) of the Act, 7 U.S.C. 6b(a)(i);
(3) by use of the mails or other means or instrumentalities of interstate commerce, directly or indirectly, employing any device, scheme or artifice to defraud clients or prospective clients, or engaging in transactions, practices, or courses of business which operate as a fraud or deceit upon clients or prospective clients, in violation of Sections 4o(1)(A)- (B) of the Act, 7 U.S.C. 6o(1)(A),(B); and
(4) advertising in a manner which: (i) employs any device, scheme, or artifice to defraud any client or prospective client; or (ii) involves any transaction, practice or course of business which operates as a fraud or deceit upon any client or prospective client, in violation of Sections 4.41(a)(1)-(2) of the Regulations, 17 C.F.R. 4.41(a)(1),(2);
(b)Orders of preliminary and permanent injunctions, restraining and enjoining defendants Future Vision, Bandemer, and Taft, and their, agents, servants, employees, successors, assigns, attorneys, and persons in active concert or participation with them who receive actual notice of this order by personal service or otherwise, from directly or indirectly:
(1)violating the provisions of Chapter 501, Part II, Florida Statutes (1993), Chapter 2-9, Florida Administrative Code and Chapter 2-18, Florida Administrative Code as more specifically alleged above;
(2)violating the provisions of Chapter 559, Part VII, Florida Statutes (1993), relating to the sale of business opportunities as more specifically alleged above; and
(3)operating or conducting any business opportunity, as defined in Florida's Sale of Business Opportunities Act, in the State of Florida, or to Florida consumers;
(c)Orders of preliminary and permanent injunctions, restraining and enjoining defendant Oster and its agents, servants, employees, successors, assigns, attorneys, and persons in active concert or participation with them who receive actual notice of this order by personal service or otherwise, from directly or indirectly:
(1)violating the provisions of Chapter 501, Part II, Florida Statutes (1993), and Chapter 559, Part VIII Florida Statutes (1993);
(d)An order appointing an equity receiver;
(e)An order directing that, within a reasonable time to be determined by the Court, an accounting be made to the Court of all assets and liabilities of defendants Future Vision, Bandemer, and Taft, together with all funds received and paid out, in or in connection with all commodity futures transactions or other investment transactions, from at least February 1994 to and including the date of such accounting; together with an accounting of all salaries, commissions, fees, loans and other disbursements of money and property of any kind, in or in connection with commodity futures transactions or other investment transactions, from at least February 1994 to and including the date of such accounting; and that such accounting be accomplished under the supervision of the equity receiver or such other officer as the Court may appoint or designate, or upon such terms and conditions as the Court may deem appropriate;
(f)An order directing that, within a reasonable time to be determined by the Court, an accounting be made to the Court of all funds received from defendants and defendants' customers by Oster during the period September 1991 and the date of the accounting; and that such accounting be accomplished under the supervision of the equity receiver or such other officer as the Court may appoint or designate, or upon such terms and conditions as the Court may deem appropriate;
(g)An order directing defendants to disgorge all benefits received including, but not limited to, salaries, commissions, fees and trading profits derived, directly or indirectly, from acts or practices with constitute violations of the Act and the Commission's Regulations as described herein;
(h)An order of restitution directing defendants to make whole each and every customer whose funds were received by the defendants in violation of the provisions of the federal commodity laws as described herein;
(i)An order rescinding all contracts entered into by defendants with any customer in violation of the federal commodities laws;
(j)An order assessing each defendant a civil penalty of not more than one hundred thousand dollars ($100,000), or triple the monetary gain to that defendant, for each violation of the Act and Regulations;
(k)An order directing defendants to pay prejudgment and postjudgment interest on any judgment entered against them;
(l)An order, if necessary and appropriate under the circumstances, prohibiting defendants and any of their agents, servants, employees, successors, assigns, attorneys, and persons in active concert or participation with those who receive actual notice of the order by personal service or otherwise, from directly or indirectly soliciting or accepting any new licensees of their micro-trading system until further order of this Court;
(m) An order awarding restitution and actual damages to all consumers who are shown to have been injured in this action, pursuant to Sections 501.207 and 559.813, Florida Statutes (1993);
(n)An order assessing against defendants herein civil penalties in the amount of Ten Thousand Dollars ($10,000.00) for each act or practice found to be in violation of Chapter 501, Part II, Florida Statutes (1993), or in violation of the Rules of the Department of Legal Affairs, pursuant to Section 501.2075, Florida Statutes (1993);
(o)An order assessing against defendants herein civil penalties in the amount of Five Thousand Dollars ($5,000.00) for each act or practice found to be in violation of Chapter 559, Part VIII, Florida Statutes (1993);
(p)An order awarding reasonable attorney's fees and costs to State of Florida, pursuant to Section 501.2105, Florida Statutes (1993); and
(q)Such other and further relief as this Court may deem necessary and appropriate under the circumstances, including those remedies available under the Act and Regulations, and Section 812.035, Florida Statutes (1993).
PLAINTIFFS DEMAND TRIAL BY JURY FOR ALL
ISSUES SO TRIABLE.
Respectfully submitted,
_______________________
David A. Reed
Associate Director
Susan E. Curtin
Jon S. Batterman
Attorneys for Plaintiff Commodity
Futures Trading Commission
Three Lafayette Centre
1155 21st Street, N.W.
Washington, D.C. 20581
(202) 418-5393
Robert A. Butterworth
Florida Attorney General
______________________
Jose Raul Gonzalez
Assistant Attorney General
for the State of Florida
Florida Attorney ID# 771015
110 S.E. 6th Street
9th Floor
Fort Lauderdale, FL 33301
(954) 712-4600
Dated: