CFTC Press Release 4999-04

Commodity Futures Trading Commission
Office of External Affairs (202) 418-5080
Three Lafayette Centre
1155 21st Street, NW
Washington, DC 20581

Release: 4999-04
For Release: September 30, 2004

COURT ORDERS ILLINOIS BROKER JOHN M. LOFGREN AND MELROSE ASSET MANAGEMENT TO PAY OVER $5.5 MILLION TO DEFRAUDED COMMODITY POOL PARTICIPANTS

Washington, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today that on August 30, 2004, Judge William J. Hibbler of the U.S. District Court for the Northern District of Illinois entered a consent order of permanent injunction against John M. Lofgren, formerly of Kenilworth, Illinois, and Melrose Asset Management of Chicago, Illinois. Lofgren was the chief executive officer of Melrose Asset Management, a registered commodity pool operator, and was registered in the futures industry as an associated person of Melrose Asset Management. The court’s action concludes a CFTC anti-fraud action against the defendants two years after it was filed on August 30, 2002 (see CFTC News Release 4695-02, September�4, 2002).

The CFTC complaint charged the defendants with misappropriating over $1.8 million from customers that had not been returned, issuing at least 200 false statements to pool participants, failing to distribute annual reports to pool participants and filing false annual reports with the CFTC. The defendants admitted the findings in the order.

The court’s consent settlement order permanently prohibits the defendants from violating the federal commodity laws, from trading commodity futures or options for themselves or others, and from applying for registration with the Commission in any capacity.

The court's order requires the defendants to pay restitution of over $1.8 million to pool participants and over $3.7 million in ill-gotten gains, for a total of over $5.5 million.

Melrose and Lofgren Separately Settle CFTC Registration Charges

In a related action, on September 29, 2004, the CFTC filed a Notice of Intent to suspend or revoke the registrations of Melrose and Lofgren based on the court's permanent injunction. On the same date, based on the consents of Lofgren and Melrose, the Commission issued orders revoking their respective registrations as a commodity trading advisor, commodity pool operator (Melrose) and an associated person (Lofgren).

The following Division of Enforcement staff members were responsible for this case: Elizabeth M. Streit, Jennifer S. Diamond, Hugh Rooney, Walter Maksymec, Cynthia Cannon, and Anne Smith.

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

Staff Contact
Rosemary Hollinger
Regional Director
Central Region Office
CFTC Division of Enforcement (312) 596-0520

Joan M. Manley
Deputy Director
CFTC Division of Enforcement
(202) 418-5356