October 23, 2012

CFTC Charges Floridian Christopher Smithers with Fraud in Connection with Commodity-Related Activities and Violations of a Federal Court’s Prior Orders

Smithers allegedly defrauded customers in trading commodity futures contracts and in the purchase of gold bullion

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that it filed a federal civil enforcement action in the U.S. District Court for the Southern District of Florida charging Christopher Smithers of Jupiter, Florida, with fraud in connection with his commodity-related activities in violation of the Commodity Exchange Act (CEA) and CFTC regulations. The CFTC complaint also charges Smithers with violating two prior U.S. District Court orders that, among other things, permanently prohibited Smithers from engaging in any commodity-related activities.

According to the complaint, filed on October 22, 2012, from at least October 2008 to March 2009, Smithers committed fraud by misrepresenting to customers that his commodity futures trading was profitable when it actually resulted in losses of $220,000. From June 22, 2011 through November 2011, Smithers allegedly falsely represented to various futures commission merchants the identity of the person who opened and controlled commodity trading accounts. Smithers made such misrepresentations to circumvent prior U.S. District Court orders that prohibited him from trading commodity futures contracts, according to the complaint.

The complaint also alleges that in 2011 Smithers misappropriated $162,980 of a customer’s funds that were provided to him for the purchase of gold bullion and that he used the funds for personal expenditures. Finally, during 2011, Smithers fraudulently solicited a customer for funds with which to trade commodity futures, according to the complaint.

The complaint alleges that Smithers’ commodity futures trading was in violation of two previous U.S. District Court for the Southern District of Florida orders of permanent injunction entered against him in CFTC v. Matrix Trading Group., Inc., David Weeden, and Christopher Smithers, Civil Action No. 00-8880-CIV-ZLOCH (S.D. Fla. Oct. 3, 2002) and CFTC v. Christopher Smithers, Prosperity Consultants, Inc., and Jack Smithers, Case No. 05-80592-CIV-Hurley (S.D. Fla. Nov. 6, 2006).

The CFTC complaint seeks civil monetary penalties and injunctive relief against Smithers.

CFTC Division of Enforcement staff responsible for this case are Harry E. Wedewer, Dmitriy Vilenskiy, Danielle E. Karst, John Einstman, Paul G. Hayeck, and Joan M. Manley.

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Last Updated: October 23, 2012