Release # 4280-99 (5:99CV54-V)

For Release: June 25, 1999

North Carolina Court Issues Preliminary Injunction in CFTC Action Charging Donald Trivette With Defrauding Investors and Misappropriating Investor Funds

WASHINGTON — The Commodity Futures Trading Commission (CFTC) announced today that on June 14, 1999, the Honorable Richard Voorhees of the U.S. District Court for the Western District of North Carolina issued a preliminary injunction against Donald Trivette of Union Grove, North Carolina, enjoining Trivette from any further violations of the Commodity Exchange Act (CEA) or CFTC regulations, requiring Trivette to provide the CFTC an accounting, and requiring him to provide the CFTC a full and complete investor list.

The order arises out of an injunctive complaint filed by the CFTC alleging that, from at least 1995 to the present, Trivette has violated anti-fraud provisions of the CEA (sSections 4b(a), 4c(b) and 4o(1)) and CFTC regulations (Section 33.10) by fraudulently soliciting and accepting in excess of $100,000 to participate in a commodity pool or, in the case of one investor, a joint account, to trade S&P 500 futures contacts and options on S&P futures contracts. The preliminary injunction order follows orders previously issued by the court which froze Trivette's books and records and assets (see CFTC New Releases #4262-99, May 7, 1999, and #4255-99, April 16, 1999).

Specifically, the CFTC complaint alleges that Trivette misrepresented to prospective investors the performance record and size of a pool he had been trading and later misappropriated at least part of the funds he had solicited by using them for his own trading and personal expenses. The complaint further alleges that Trivette continuously represented to investors that their investments were doing well and earning double-digit returns, when, in fact, both the commodity pool account and Trivette's other trading accounts all lost money in 1996, 1997 and 1998.

The complaint also alleges that Trivette falsely represented to investors that their monies were seized or frozen by the Chicago Mercantile Exchange (CME), where he had been a registered floor broker from 1993 to 1998, when in fact there was little or no money remaining in Trivette's accounts and no monies were seized or frozen by the CME.

The complaint also alleges that Trivette commingled investor funds with his own funds, failed to operate the commodity pool as an entity separate from himself, and accepted trading funds in his own name, , all in violation of CFTC regulations (CFTC Regulation 4.20).

In its continuing litigation, the CFTC is seeking civil money penalties and other remedial relief, including restitution to customers.

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