Release: 4997-04
For Release: September 28, 2004

U.S. COMMODITY FUTURES TRADING COMMISSION CHARGES FLORIDA BUSINESSES AND EMPLOYEES WITH FRAUD

CFTC Alleges that Wilshire Investment Management Corporation, Owner Andrew Alan Wilshire, Employees Eric Scott Malcolmson and James Joseph Russo, and Guarantor National Commodities Corporation, Inc. Fraudulently Solicited Customers to Trade Option Contracts

WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of an injunctive complaint in the United States District Court for the Southern District of Florida against Wilshire Investment Management Corporation (WIMC) and Andrew Alan Wilshire of Jupiter, Florida, Eric Scott Malcolmson of Tequesta, Florida, James Joseph Russo of Palm Beach Garden, Florida, and National Commodities Corporation, Inc. of Fort Lauderdale, Florida.

The complaint alleges that since at least September 2000, the defendants WIMC, Wilshire, Malcolmson, and Russo fraudulently solicited customers by misrepresenting the likelihood that a customer would realize large profits from commodity options trading and by misrepresenting the risk involved in trading commodity options. According to the complaint, these defendants also misled customers about the effect current events would have on option prices by citing well-known public information that was already factored into the options prices. As also alleged, during the course of their solicitations, these defendants failed to disclose their excessively poor trading record.

The complaint also alleges that, pursuant to an agreement signed by the two companies in September 2000, National Commodities Corporation is WIMC's guarantor, and thus is jointly and severally liable for all of WIMC's obligations.

The CFTC is seeking preliminary and permanent injunctions against defendants, repayment of defrauded customers, the return of ill-gotten gains, and monetary penalties for violating the Commodity Exchange Act.

The following CFTC Division of Enforcement staff members are responsible for this case: Rachel Entman, Jason Gizzarelli, Karen Kenmotsu, Gretchen L. Lowe and Richard Wagner.

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Media Contacts
Alan Sobba
202) 418-5080
Dennis Holden
(202) 418-5088
Office of External Affairs

Staff Contact
Gretchen L. Lowe
Associate Director, CFTC Division of Enforcement
202-418-5379

Related Document
Complaint