Release:4015-97 (97Civ-3119)

For Release:April 30, 1997

CFTC FILES CIVIL ANTI-FRAUD AND REGISTRATION CHARGES IN NEW YORK FEDERAL DISTRICT COURT AGAINST AVCO FINANCIAL CORP.,

ANTHONY VARTULI, AND J. MICHAEL GENT IN CONNECTION WITH THE SALE AND MARKETING OF THE RECURRENCE TRADING SYSTEM

WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today the filing of a three-count civil complaint in the U.S. District Court for the Southern District of New York against AVCO Financial Corp. (AVCO), a Connecticut corporation based in Greenwich, Connecticut, and two individuals: Anthony Vartuli and J. Michael Gent both of Greenwich, Connecticut. AVCO, Vartuli, and Gent have never been registered with the CFTC in any capacity.

The CFTC complaint charges AVCO, Vartuli, and Gent with violating anti-fraud and registration provisions of the Commodity Exchange Act (CEA) and CFTC regulations. The complaint alleges that the defendants are fraudulently soliciting customers to purchase their technical analysis software program, known as Recurrence, which provides specific advice about transactions in exchange-traded foreign currency futures. In addition, the complaint charges AVCO with acting as an unregistered commodity trading advisor, and Vartuli and Gent with controlling AVCO and aiding and abetting its violations in the sale, marketing, and support of Recurrence.

Specifically, the complaint charges the defendants with, among other things:

misrepresenting the historic profitability of Recurrence;

misrepresenting the ability of Recurrence to pick profitable trades;

misrepresenting the nature of the performance record of Recurrence; and

misrepresenting or downplaying the risks of trading in commodity futures contracts with Recurrence.

CFTC Seeks Civil Monetary Penalties, Restitution, and Disgorgement of Ill-Gotten Gains, Among Other Sanctions

The CFTC is seeking a permanent civil injunction against the defendants, restitution to customers, disgorgement of ill-gotten gains, and a civil monetary penalty against each defendant of up to $110,000 or triple the monetary gain, whichever is greater, for each violation, among other remedial sanctions.