September 26, 2013

CFTC Files Enforcement Action Charging Missouri Resident Daniel K. Steele and His Foreign Currency  Firm with Violations of the Commodity Exchange Act and Forex Regulations

Court enters Order freezing Defendants’ assets and protecting books and records

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of a civil Complaint against Defendants Daniel K. Steele of Rolla, Missouri, and his firm Champion Management International, LLC (Champion Management).  The CFTC’s Complaint charges Steele with, among other things, engaging in an act or practice which operated as a fraud or deceit under Section 4o(1)(B) of the Commodity Exchange Act (CEA) for failing to disclose material information, including that defendants were acting as unregistered Commodity Pool Operators (CPO) for at least two commodity pools engaging in off-exchange retail foreign currency transactions (forex).  The Complaint also charges Steele with failing to disclose that the counterparty to the retail forex transactions that were offered or entered into with the respective pools was not registered as a Retail Foreign Exchange Dealer (RFED).  The Complaint charges Champion Management with acting as an unregistered CPO in connection with a third forex pool. The Complaint further alleges that neither Defendant has ever been registered with the CFTC in any capacity. 

The complaint, filed on September 25, 2013, in the U.S. District Court for the Eastern District of Missouri Eastern Division, alleges that from at least February 28, 2011 through the present (relevant period), Steele individually and acting as an agent of Champion Management, solicited at least $1.7 million from at least 24 pool participants to participate in three forex pools.  The Complaint further alleges that Steele, during the relevant period, failed to disclose material information to pool participants, which operated as a fraud in that neither he nor Champion Management were properly registered with the CFTC and that he misappropriated a portion of pool participants’ funds.

On September 25, 2013, the same day the complaint was filed, Judge Rodney W. Sippel, of the U.S. District Court for the for the Eastern District of Missouri, entered under seal an emergency order freezing the defendants’ assets and prohibiting the destruction or alteration of books and records.  The judge set a hearing date on the CFTC’s motion for a preliminary injunction for October 7, 2013.

In its continuing litigation, the CFTC seeks a return of ill-gotten gains, restitution, civil monetary penalties, trading and registration bans, and permanent injunctions against further violations of the federal commodities laws. 

The CFTC appreciates the assistance of the Missouri Secretary of State, Securities Division and the United States Postal Inspection Service.

CFTC Division of Enforcement staff responsible for this case are: Eugene Smith, Melanie Devoe, George Malas, Kyong J. Koh, Peter M. Haas, and Paul G. Hayeck.

Media Contact
Dennis Holden
202-418-5088
 

Last Updated: September 26, 2013