UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
FORT LAUDERDALE DIVISION

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I

INTRODUCTION

1. On May 5, 1999, plaintiff Commodity Futures Trading Commission ("Commission") filed a complaint against defendant David Michael Loyd ("Loyd"), and others, alleging violations of the Commodity Exchange Act ("Act"), as amended, 7�U.S.C. ���1 et seq. (1994), and the regulations promulgated thereunder, 17�C.F.R. ��1.1 et seq. (1999). On May 14, 1999, this Court entered a Consent Order of Preliminary Injunction And Other Equitable Relief Against David Michael Loyd.

2. To effect settlement of this action without a trial on the merits or further judicial proceedings, Loyd consents to this Consent Order Of Permanent Injunction And Other Equitable Relief Against Defendant David Michael Loyd ("Order"). Loyd also: (1)�acknowledges service upon him of the summons and complaint in this action; (2)�admits this Court's personal and subject matter jurisdiction over him and this action; (3)�admits that venue properly lies with this Court; and (4)�waives the entry of findings of fact and conclusions of law in this action pursuant to Fed.�R. Civ.�P.�52, except as provided in Part�II below.

3. By consenting to the entry of this Order, Loyd neither admits nor denies the allegations of the Commission's complaint or the findings of fact made by this Court and contained in Part�II of this Order, except as to jurisdiction and venue. However, Loyd agrees and the parties to this Order intend that the allegations of the Commission's complaint and all of the findings of fact made by this Court and contained in Part�II of this Order shall be taken as true and correct and be given preclusive effect without further proof in any bankruptcy proceeding filed by, on behalf of, or against Loyd for the purpose of determining whether his restitution obligation and/or other payments ordered herein are excepted from discharge. Loyd also shall provide immediate notice of any bankruptcy proceeding filed by, on behalf of, or against him in the manner required by Part�V, paragraph 1. of this Order.

4. Loyd agrees that: (1) he will not take any action or make or permit to be made any public statement denying, directly or indirectly, any finding or conclusion contained in this Order or creating, or tending to create, the impression that this Order is without a factual basis; and (2) no agent or employee of Loyd acting under his authority or control shall take any action or make or permit to be made any public statement denying, directly or indirectly, any of the findings or conclusions in this Order or creating, or tending to create, the impression that this Order is without factual basis, and Loyd shall undertake all steps necessary to assure that all of his agents and employees understand and comply with this agreement. Nothing in this provision affects Loyd's: (1) testimonial obligations; or (2) right to take legal positions in other proceedings to which the Commission is not a party.

5. Loyd waives: (1) all claims that he may possess under the Equal Access to Justice Act ("EAJA"), 5 U.S.C. � 504 and 28 U.S.C. � 2412, as amended by Pub. L. No.�104-121, ���231-32, 110�Stat.�862-63, and Part 148 of the Commission's Regulations, 17�C.F.R.����148.1 et�seq., relating to or arising from this action and any right under EAJA to seek costs, fees, and other expenses relating to or arising from this proceeding; (2) any claim of Double Jeopardy based upon the institution of this proceeding or the entry in this proceeding of any order imposing a civil monetary penalty or any other relief; and (3) all rights of appeal from this Order.

6. Loyd consents to the continued jurisdiction of this Court for the purpose of enforcing the terms and conditions of this Order and for any other purposes relevant to this action.

7. Loyd agrees to cooperate fully with the Commission in the prosecution of its complaint in this action, in any ongoing investigations related to the subject matter of the complaint in this action, and in all other proceedings arising from such investigations by, among other things: (1)�responding promptly, completely, and truthfully to any inquiries or requests for information and otherwise cooperating fully with discovery; (2)�providing authentication of documents; (3)�testifying completely and truthfully; and (4)�not asserting privileges under the Fifth Amendment of the United States Constitution in connection with any testimony he is asked to provide.

8. Loyd affirms that he has read this Order and agrees to this Order voluntarily, and that no promise or threat of any kind has been made by the Commission or any member, officer, agent, or representative thereof, or by any other person, to induce his consent to this Order, other than as set forth specifically herein.

9. Loyd acknowledges that this Court is not ordering payment of a civil monetary penalty pursuant to Section 6c(d) of the Act, 7�U.S.C. ��13a-1(d), or immediate payment of restitution, other than as required by paragraphs 1. and 2. of Part IV below, based upon the accuracy and completeness of Loyd's sworn representations to the Commission concerning his financial condition. If at any time following the entry of this Order, the Commission obtains information indicating that any of Loyd's representations to the Commission concerning his financial condition were fraudulent, misleading, inaccurate, or incomplete in any material respect as of the time such representations were made, the Commission may, in its sole discretion and without prior notice to Loyd, petition this Court for an order requiring Loyd immediately to pay full restitution or a civil monetary penalty. In connection with any such petition, the only issues shall be whether the financial information provided by Loyd was fraudulent, misleading, inaccurate, or incomplete in any material respect as of the time such representations were made, and the amount of civil monetary penalty to be imposed. In its petition, the Commission may request that this Court consider all available remedies, including, but not limited to, ordering Loyd to pay funds or transfer assets, directing the forfeiture of any assets, imposing sanctions for contempt of this Order, and/or the Commission may also request additional discovery. Loyd shall not, by way of defense to such petition, challenge the validity of his consent to this Order, contest the allegations of the Commission's complaint or the findings or conclusions contained in this Order, contest the amount of restitution, or assert that payment of restitution or a civil monetary penalty should not be ordered.

10. This Court, being fully advised in the premises, finds that there is good cause for the entry of this Order and that there is no just reason for delay. This Court therefore directs the entry of findings of fact and a permanent injunction and other equitable relief, pursuant to Section 6c of the Act, 7�U.S.C. ��13a-1, as set forth herein.

II

FINDINGS OF FACT

1. In the fall of 1997, Loyd began soliciting individuals to invest in a commodity pool called at various times either the Europacific Fund or the International Investment Fund ("Fund") and operated by an entity known either as EuroPacific Equity and Capital Management, Ltd. ("Europacific") or International Investment Group, Ltd. ("IIG"). During the period Fall�1997 through September�1998, Loyd attended two seminars in Cancun and two seminars in Aruba to solicit individuals for the Fund.

2. At the seminars, Loyd claimed that defendant Richard Tichy ("Tichy") managed the Fund. Loyd stated that Tichy had designed a new computer software program to trade futures contracts on the Standard and Poor's 500 Stock Index. Loyd said that he expected returns of 100% for investors and claimed that Tichy was a highly successful trader. He stated that Tichy had tested the computer trading program using his own money and had achieved returns of 754% in a three-year period. At one or more of the seminars, Loyd provided attendees with brochures claiming that the Fund had returned 16.72% in profits during the first two months of 1998 and that the minimum projected return for 1998 was 134.21%. In addition, after the seminars, in private meetings with prospective investors, Loyd again claimed that Tichy had designed a computerized trading program that had yielded very profitable trading results in excess of 100%.

3. Loyd had no knowledge that Tichy ever achieved any of the profit returns or that any customer funds actually were invested in commodity futures or options contracts. Loyd made the representations about Tichy's trading record and the Fund's profitability with knowing or reckless disregard as to their truth.

4. By touting Tichy's purported trading record and the Fund's profitability, Loyd solicited at least one hundred four (104) individuals and entities to invest at least $2,595,307 in the Fund.

5. Individuals who attended the seminars subsequently telephoned Loyd at IIG's office in Florida or in the Bahamas to make arrangements to invest in the Fund. Pursuant to Loyd's instructions, individuals filled out account opening agreements for the Fund and sent them to Loyd at one of IIG's offices.

6. Pursuant to instructions contained in the account opening documents, individuals wired funds either to (1)�a money-market account at Charles Schwab & Co., Inc. in the name of Europacific; or (2) an account in the name of IIG at Barclays Bank in the Bahamas. Loyd knew that Tichy controlled these accounts.

7. Loyd sent monthly account statements and accompanying cover letters to investors that falsely represented that the Fund was generating profits. The account statements reported that each investor's return on his or her investment was increasing each month, but did not disclose, as required, the Fund's specific trading activity. The cover letters summarized fictitious trading activity in the Fund, falsely represented that the Fund's net asset value was increasing, and misrepresented the investors' share of profits in the Fund. For example, investors received letters in May 1998 stating that 50% of the pool funds had been invested in the market and that a 24.31% profit had been realized. Investors also received letters in June�1998 stating that 75% of the pool funds had been placed in the market and that a 31.73% profit had been realized. In August�1998, investors received letters stating that the return on their investments in the Fund had surpassed 50% for 1998 and that they were on track to receive a 60% to 70% return on their investments by the end of 1998.

8. In fact, investors never realized any profits from depositing their money in the Fund. Of the $2,595,307 invested, only approximately $134,000 was traded in the futures markets. Tichy traded this money in a Europacific proprietary account, not an account in the name of the Fund. All funds in this account were lost in losing trades.

9. Defendants Tichy, Europacific, Tortola Corporation Company, Ltd., and IIG misappropriated all remaining investor funds by using them for personal expenses or by transferring them to unrelated individuals and entities.

10. Loyd had no knowledge that any customer funds actually were invested in commodity futures or option contracts or that investors ever actually earned any profits. Loyd reported the profitability of the Fund to investors with knowing or reckless disregard as to the true status of investor funds.

11. Investors deposited money into the Fund in reliance upon Loyd's representations regarding Tichy's trading record and the Fund's past and current profits.

12. Loyd failed to provide investors with (1)�a Disclosure Document for the Fund, as required by the Act and the Regulations, and (2)�statements of account and annual reports in the form and manner required by the Commission. In addition, Loyd failed to file, as required, a Disclosure Document with the Commission.

III