Release: #4162-98 (1-98-CV-1594, N.D. Georgia)
For Release: July 1, 1998
GEORGIA DISTRICT COURT ISSUES PERMANENT INJUNCTION AGAINST CHRISTOPHER C. SCHAFER IN CFTC'S CIVIL ANTI-FRAUD ACTION; SCHAFER IS ORDERED TO PAY RESTITUTION TO DEFRAUDED INVESTORS
CFTC Civil Action Charged Schafer with Defrauding Customers by Providing False Statements and Commingling Funds, Among Other Violations of Federal Commodity Law
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that on June 26, 1998, the Honorable Clarence Cooper, U.S. District Judge for the Northern District of Georgia, entered a consent order of permanent injunction against Christopher C. Schafer of Alpharetta, Georgia.
In the order, which stems from a two-count CFTC injunctive complaint filed on June 4, 1998 (see CFTC News Release #4158-98, June 16, 1998), Schafer admits liability for fraudulent actions taken in connection with commodity customers and has agreed to make restitution to customers.
Specifically, the order finds that from January 1993 through April 1996, Schafer solicited, accepted, and received at least $253,785 from at least 12 customers to trade commodity futures. The order finds that in handling such funds he violated the Commodity Exchange Act's anti-fraud provisions by fraudulently reporting and issuing false statements to customers regarding purported profits earned, when, in fact, the accounts had incurred significant losses.
Finally, the order finds that Schafer commingled customer funds with those of his own and acted as a futures commission merchant (FCM) without being registered as an FCM with the CFTC. The order permanently enjoins Schafer from committing further violations of the CEA and CFTC regulations, as charged, from seeking CFTC registration, and from acting in any capacity which requires registration or from engaging in any commodity futures-related activity.
NFA Appointed Monitor to Disburse Funds to Investors
The order directs Schafer to make continuing repayments, based upon his income, of all customer losses. The payments will be made to the National Futures Association (NFA), acting as Monitor, amounting to approximately $250,000, plus post-judgment interest. That amount is subject to adjudication of differences between Schafer and two customers about the amount of their losses. The NFA, as Monitor, is charged with disbursing those funds to customers under terms in the order.