Release: 4634-02 (CV-0362-8)
For Release: April 29, 2002
U.S. GOVERNMENT AGENCY SETTLES FRAUD CASE AGAINST GEORGIA COMMODITY TRADING ADVISOR WHO WAS A REPEAT OFFENDER
Defendant Ellery Coleman Ordered to Pay a Penalty of up to $170,000
WASHINGTON, D.C. -- The Commodity Futures Trading Commission (CFTC) announced today the settlement of an enforcement action filed on September 13, 2001, against Ellery Coleman, d/b/a Granite Investments of Warner Robins, Georgia.
The CFTC complaint, filed in federal district court for the Middle District of Georgia, Macon Division, alleged that Coleman fraudulently promoted commodity trading systems and other services by making false claims that the systems generated huge profits at little risk and that he personally and profitably traded using the systems (see CFTC News Release 4568-01 September 17, 2001). The CFTC further charged that through such false claims, Coleman violated a prior CFTC order issued against him in May 2000 based on the same type of fraud (see CFTC News Releases 4442-00, September 7, 2000 and 4397-00, May 1, 2000.)
Specifically, the CFTC complaint alleged that, despite the prior CFTC order, Coleman resumed his fraudulent promotions over the Internet and through e-mail and electronic newsletters. For instance, according to the complaint, Coleman represented that he had been trading for a long time and told one customer, “Yes, I am making a net profit using my system.” In fact, however, according to the complaint, Coleman engaged in minor trading on only two days after the initial CFTC order was issued, and each of those trading days resulted in losses. The complaint also alleged that Coleman falsely claimed that his systems generated significant profits, and that Coleman did not properly disclose that the profit claims were based on hypothetical trading, not actual trading. Coleman also offered money-back guarantees to make similar profit claims and did not have a basis for such claims, according to the complaint.
Coleman, in consenting to the entry of the court’s order, neither admitted nor denied the allegations in the complaint. The order, entered on April 23, 2002, enjoins Coleman from further violations of the anti-fraud provisions of the Commodity Exchange Act, as alleged in the complaint, and from violating the May 2000 CFTC order and any other CFTC order. The court’s order also:
Vince McGonagle, Acting Associate Director, and Lael Campbell, trial attorney, of the CFTC’s Division of Enforcement are responsible for this case.
Media Case Contact
Vince McGongale, Acting Associate Director
CFTC Division of Enforcement (202) 418-5387
A copy of the CFTC’s September 2001 complaint filed against Coleman may be found at http://www.cftc.gov/enf/00orders/enfcoleman.htm.
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