U.S. Commodity Futures Trading Commission v. Southern Trust Metals, Inc. et al

Filing 167

FINAL JUDGMENT in favor of U.S. Commodity Futures Trading Commission against Loreley Overseas Corporation, Southern Trust Metals, Inc., Robert Escobio. Signed by Senior Judge James Lawrence King on 8/29/2016. (jw) NOTICE: If there are sealed documents in this case, they may be unsealed after 1 year or as directed by Court Order, unless they have been designated to be permanently sealed. See Local Rule 5.4 and Administrative Order 2014-69.

I TH E U NI
N
TED STA TES DI
STR I T C O U R T
C
FO R T H E SO UTH ER N D I
STR I O F FLO R I
CT
DA

CASE NO.1: 4- 22739- N G
1 CVK1

U. COM M ODI FUTURES TRADI
S.
TY
NG
CO M M I ON.
SSI
Pl ntf ,
ai if

SO U TH ERN TR U ST M E TAL S,I C O
N
LORELEY OVERSEAS CORPO RATI
ON,
and ROBERT ESCOBI ,
O
Def
endant
s.

FI A L JU D G M EN T
N

Fia j d me t sh rb ENTERED i fvo o P anifUn tdS ae Co dt
n lu g n i ee y
n a r f litf ie tts mmo i
y
FuursTrdi Commison(S
t e a ng
si %
CFTC' a a i tDef nt Sout r Tr tM eas l s
' nd gans enda s hen us tl,nc.
)
Lor e Oves a Cor ai a Rober Esobi (ole tveyA fnda s' o Count 2a
ely re s porton, nd
t c o c lci l ' e nt' n
De
)
s nd
3 oft Compli ,J m e a t la lt ag i tt e Def nt on Count 1a 4 oft
he
ant udg nt s o ibiiy a ns hes
enda s
s nd
he
Com pt i tw a pr vi l e e e by t s Co ton A prl7, 2
a n s e ous y nt r d
hi ur
i
016. e D E 1
Se
22.

I i he eby ORDERED AND ADJUDGED asf l :
ts r
olows
1
.

PER M AN ENT I JUN C TI N
N
O

Ba e on a i c
sd
nd n onneci wih t sCour ' Fi ngsofFa ta ConcusonsofLaw
ton t hi
ts ndi
c nd
l i

( 1 ,heCour' Aprl7,201 Or rGrntng SummayJ
DE 66)t
ts i
6 de a i
r udgme t Pl ntf onCount 1
nt o ai if
s

a 4oft Compli ( 1 ,a purua t Se ton6coft Commodiy Exc
nd
he
ant DE 22) nd s nt o ci
he
t
hangeAc,
t

a a n e , U.. j1 a 1 Dee d nsaepema e tye j n da pr hbi dfo drcl
s me d d 7 SC. 3 - , f n a t r r n n l noie nd o i t r m ie ty
e
o i rcl
r ndie ty:

ta igo o s be t ter lso a yr gse e e tt a t a tnn i d fn di
r dn n r u jd o h ue f n e itr d n i s h t e s e ie n
y,
Se ton l oft Ac,7U. C.j 1
ci a he t S.
a;
b. c r lng ordie tng t ta ng f ro on be fofa ot rpe s orentt
ontoli
r c i he r di o r
hal
ny he r on
iy,
whehe by powe ofat r y oro he wie,i a ac ounti vi commodiy
t r
r to ne
t r s n ny c
nvol ng
t
i er t
nt es s;

c. s iii r ce vi ora ce i a f
olctng, e i ng, c ptng ny undsfo a pe s f t pur e of
r m ny r on or he pos
pu chasng or s lng any com m odiy i e es s
r i
eli
t nt r t ;
d. a yi f r s r ton orc a m i e m pton f om r s r ton w ih t
ppl ng or egit a i
l i ng xe i r egit a i
t he

Comm ison i any c pa t and e gi i a a tviy r quii s h
si n
a ciy,
nga ng n ny c i t e rng uc
r sr ton ore m pto f o r gitai n wiht Co m ison,e eptas
egita i
xc i n r m e sr to t he m s i xc

pr de f i Reg ai 4.4()9) 1 C. R.j4.4()9) a
ovi d or n ulton 1 a( , 7 F.
1 a( ; nd

a tng a aprnci l( t ttr i defne i Regulton3.() 17C. R.j
ci s i pa as ha em s i d n
ai 1a , F.
3.( ,a tora ot rofi rore oye ofa pe s ( t ttr i
la) gen ny he fce mpl e ny ron as ha em s
de
fnedi Se ton l oft Ac,7U. C.j 1 ) ore iyr serd,e mpt
n ci a he t S.
a, ntt egit e xe ed
fom r gita i orr r d t be r it e wih t Comm ison,e pta
r e sr ton equie o
eg ser d t he
s i xce s

pr dedf i Reg ai 4.4()9) 1 C. R.j4.4()9)
ovi or n ulton 1 a( , 7 F.
1 a( .
1.
I

RESTI
TUT I N A ND CI I M O N ETA RY PEN A LTY
O
V L

R estt i
iuton

De e nt s l pa r tt i i t t alamountof$1,43, i c
f nda s ha l y esiuton n he ot
5 892 n onnec i
ton

wi t elv r g dp e iusmeasta a to st taet es be t fCo n sl 2a d 3o t
t h e ea e r co
h
tl rnscin ha r h u j c o u t , n f he
ClTC' Co li t Dee da t aej itya ds v r l la l f rr si to t a ype s nwho
7 s mpan. fn ns r on l n e eal ib e o e tt in o n ro
y
u

e ged i a l tm one i c
nga
n nd os
y n onne ton w ih l ver ge pr i m et st a a i w ih
ci
t e a d ec ous al r ns ctons t
Sou he n Tr tM e al ,I bet e n J y 1 201l a A pr l31 201 i t am ountoft t
t r us
t s nc. w e ul 6,
nd
i , 3, n he
ha
pe s sl s
r on' os .
2.

Def nda sSout r Tr tM e al ,l .a Robe tEs obi s l pa r tt i
e nt
he n us
t s nc nd
r c o ha l y es iuton

it a
n he mountof$559, i c cton wih t f ur sa optonsta a tonst tar t
725 n onne i
t he ut e nd i r ns c i ha e he

s b e to Co n 4o teCF SCo an.De e d n sS uhenTr tMeas Ic a d
u j c f u t f h TC' mplit fn a t o t r us tl,n . n
Ro et c bi aej itya ds v r l la l f rr si to t a yp ro whoe g g di a d
b r Eso o r onl n e e al ib e o e t u in o n e s n
y
t
n ae n n
l tm one i c
os
y n onne ton w ih f ur s a optonst a a tons c
ci
t ut e nd i r ns c i
onduc ed t ough Sout r Tr t
t hr
he n us

M e as l The r siuton a
t l, nc.
e tt i mount des rbe i t sSe ton a e r f red t i t r mai rof
s c i d n hi c i r e e r o n he e nde
t sOr rast S tt i Oblgai nhi de
he l iuton i to '
Res
'

Dee da t s al yteRettto Obi ain pu p s-u g n itrs,
fn ns h lpa h siuin lg to , ls o tj d me t ne et
wihi t ( 0)da oft daeoft e r oft sOr .l t Rett i Oblgai i not
t n en 1 ys he t he nty hi der f he siuton i ton s

padi f l wi i tn( 0 d yso ted t o e tyo hsOr e ,h n p s-u me titr s
i n u l t n e 1 ) a f h ae f n r ft i d rt e o t dg n nee t
h
j
s l a c ue on t Resiuton Oblgai begi ng on t da eofe r oft sOr ra s l
ha l c r
he tt i
i ton
nni
he t
nty hi de nd ha l
be d t r i d by usng t Tr s y Bilr t pr ii on t da eofe r oft sOr r
e e m ne
i he ea ur l ae eva lng he t
nty hi de

puruan t 28U. C.j 1 (
s to
S.
961 2006)
.
4.

To e f tpa e oft Resiuton Oblg ton and t diti i ofany
fec ym nt he tt i
iai
he srbuton

r tt i pa en s t D e en nt ' us om e s t Cour a nt t N a i
es iuton ym t o f da s c t r , he
t ppoi s he tonalFut es
ur

Aso ai (i ' a Monior(t onior'.TheMoniors lc lc rsiutonpa
s citon ç
NFA') s
t s
M t'
)
t hal ole t e tt i ymens
t
fom De e
r
f ndant a makediti i ass tf t beow . ca et M oniori a tng a a
s nd
srbutons e orh l Be us he
t s ci s n
of eroft s Cour i pe f m i t e s r c s t N FA s l no be la e f a a ton or
Nc
hi
t n r or ng hes e vi e , he
ha l t i bl or ny c i
i c i a ii f om N FA' a
na ton r s ng r
S ppoi m e asM onio , he t n a i i vi f ud.
nt nt
t r ot r ha d ons nvol ng ia

D e e nt s l m a Res iuton O blg i pa en s unde t s Or rt t
f nda s ha l ke tt i
i aton ym t
r hi de o he

M onio i t na eisout r Tr tM e asRe tt i n Fund' a s l s nd s h Re tt i
t r n he m i he n us t l siuto
' nd ha l e uc
siuton
O blga i pa e s by e e t oni f
i ton ym nt
l c r c undst a f ,orby U . pos a m one or r ee ttedche k,
r ns er
S, t l
y de , ri
s
c

ba ca hi rs orba mone or r t t M o t ra t Ofi eofAdm i sr ton, N a i l
nk s e ' ,
nk
y de ,o he nio t he tc
nitai
tona
Fu ur s A s oc a i 300 Sout R i r i Pl z Suie 1
t e s i ton,
h ve s de a a, t 800,Chi a , llnoi 60606 unde co r
c go li s
r ve

lte t ti ii st payi De e nt a t na a doc tnum be oft spr e ng.
et r ha dentfe he
ng f nda s nd he me nd ke
r hi oc edi
Thepayi Def nda ss l smula ousyta m i c e oft co rl te a t f m of
ng e nt ha l i tne l r ns t opis he ve et r nd he or
pa m e t t ChifFi nei lOfs e ,
y nt o he e na a te r Commodiy Fut esTr di Com mison, Thr e
t
ur
a ng
si
e
La a te Ce r 1 21 tSt e t N W , as ngt D . 20581.
f ye t nte, 155 s r e ,
W hi on, C.

6.

The M oniors l ove s et Re tt i n Oblga i a s lha t dic e i
t hal r e he siuto
i ton nd hal ve he s r ton

t de e m i t ma
o t r ne he nnerofditi uton ofs h f
srb i
uc undsi a e t bl f hi t t Def nt '
n n quia e as on o he enda s
c t
usomer i ntfe by t Co ison orm a de e diti i n u i s h tme a t M onio
s de ii d
he mm s i
y f r srbuto ntl uc i s he
tr
de m s a o i t . l t e ntt tt am ountofRe tt i O blga i pa e st t
e
ppr pra e n he ve ha he
s iuton
i ton ym nt o he

M oniora eofa demi mi na ur s h t tt M o t de e m i st t a i sr i c t
t r
ni s t e uc ha he nior t r ne hat he dm nitatve os
ofm a ng a dit i i t elgi e c t e si i pr c i l t M o t m a i isdi c e i
ki
s rbuton o i bl us om r s m a tca , he nior y, n t s r ton,
t e ts r tt i pa e sasc vi m one a y pe ly pa e s w hi h t M o t s l
r a uch es iuton ym nt
i l
t r na t ym nt ,
c he nior ha l

f wa d t t Comm iso f l ngt i tuc i f c vi m onear pe t paymen ss
or r o he
s in olowi he nsr tons or i l
t y naly
t et
f t i Pa t . ow .
orh n r B bel
D e e nt s l c
f nda s ha l oope a e w ih t M oniora a opr a e t pr de s h
r t t he
t s ppr i t o ovi uc

i o ma i a t M oniorde m sne es a y a ap opra et i ntf t c t e st whom
nf r ton s he
t
e
c s r nd pr it o de iy he usom r o
t M onior i is s e di c e i m a de er i t i l i a pl n f d s rbuton ofa
he
t , n t ol s r ton, y t m ne o nc ude n ny a or i t i i
ny
Re tt i Oblga i n pa ent . D e e nt s l e eut a doc e snec s r t r l s
s iuton
i to ym s
f nda s ha l xe e ny um nt
es a y o e ea e

4

f ndst t ha i any r pos t y,ba i t e oro he fna a i tt i whe e r
u
hat hey ve n
e ior
nk, nves m nt t r i nci l ns iuton, r ve
l a e i or t m a pa ta o t alpa en t r t Res iuton Oblga i
oc t d, n der o ke r i l r ot ym t owa d he tt i
i ton.

Untldic r d by t Cour,t M oniors l pr det Commis o a t
i s ha ge
he
t he
t hal ovi he
s i n t he
begi ng ofe h c e rye rwih ar por deaii t dibur e e off
nni
ac alnda a t e t t lng he s s m nt undst De e
o f ndant'
s
c t e sdur ng t pr vi ye r The M onior s lt a m i t sr po tunde a c r l te
usom r
i he e ous a .
t hal r ns t hi e r
r ove e t r
t ti ntfe t nam e and doc tnum be oft s pr e ng t t Chi fFi nc alO fi er
ha de ii s he
ke
r hi oc edi o he e na i
fc ,
Co m odiy Fut esTr di Com m i son, e Laf ye t Ce r 11 21 tSte ,N W ,
m
t
ur
a ng
s i Thr e a te nte, 55 s r et
Bp hi on,D , 20581.
as ngt
C.

9.

The a
mount paya et e h c t
s
bl o ac usomers l no lmi t a lt ofa c t e
hal t i t he biiy ny usom r

t pr t ta g e t a ounti owe by De e
o ove ha r aer m
s d
f ndant ora ot rpe s oren iy,a not ng
s ny he r on
tt nd hi
he ei s l be c tue i a wa t lm i ora i t rght ofa c t e t e s
r n hal onsr d n ny y o i t brdge he i s ny usom r hat xit
unde s a e orc m on l w .
r tt
om
a
l
0.

Pur ua t Rul 71 oft Fe a Rul s ofCi lPr e e,e h c t e of
s nt o
e
he der l e
vi oc dur ac us om r

De e nt who s f r d a l si explcty ma a i e d t r pa t be i i r oft s
f nda s
ufe e os s
i il de n nt nde hid- ry nefc a y hi
Or r a m a s e t e or obe e e oft s Or rt obt i s ts a ton ofany pori n of
de nd y e k o nf ce di nc
hi de o a n a i f c i
to

t r tt i t tha notbee pa dby Defnda st ens e c i d c pla wih a
he esiuton ha s
n i
e nt o ur ontnue om ince t ny
pr s on oft s Or a t hol Def nda si c e ptf any vi a i ofa pr son of
ovi i
hi der nd o d
e nt n ont m or
ol tons ny ovi i
t s Or .
hi der
To t e en t ta f
he xt t ha ny undsa r t t U . Tr s y f s t s a i of
cc ue o he S. ea ur or a i f cton
D e e nt 'R e tt i O blga i n,s h f
f nda s s iuton
i to uc unds s l be t a f r d t t M oniorf
ha l r ns er e o he
t or

dibureme i a cor ncewih t pr ed ess f t abo .
s s nt n c da
t he oc ur et orh ve
B. Ci lM onet Penaly
vi
ary
t

De e nt Sou he n Tr tM e a s I , e e Ove s asCor a i , a
f nda s t r us t l, nc.Lor l y
re
por ton nd

Ro e t c boaej itya ds v rlyla l fra ds lpa acvlmo eayp nat o
b r Es o i r on l n e eal ibe o n hal y ii n tr e ly f

$25 91 66( t r oft t a mo t ygant De e nt of$764, i co ci wih
4, 9. one-hid he otl near i o f nda s
759) n nne ton t
t i vi a i oft Comm odiyExc ng Actdes rbe i Count 1 2 a 3 oft
her oltons he
t
ha e
ci d n
s , nd
he
Compl nt a asf t rdes rbed i t sCo tsOr rofSum ma y J
ai , nd urhe
c i n hi ur' de
r udgm e , t s
nt and hi
Cou tsFi ngsofFa ta Concl i ofLa .
r ' ndi
c nd
us ons
w

2.

Dee da t So t enTr tMeas I c a dRo etEs o i aej itya d
fn n s uh r us tl,n . n b r c b o r on l n

sve al la ef ands lpa acvimo aype lyof$1 11 33( t r oft t a
e r ly ibl or
hal y i l netr nat
20, 2. one-hid he otl
moneay gant Defnda sof$36 33 Dee ntSout r Tr tM eas I c r edis
tr i o e nt
0, 7) fnda
hen us tl, nc. ha g t'
f ursc t r)i c
ut e usome s n onneci wiht vi ai oft CommodiyExcha Ac de ci d
ton t he oltons he
t
nge t s rbe
i Count4 oft Compl ntand a f t rdes rbe i t sCour' Or rofSumm a y
n
he
ai
s urhe
c i d n hi
ts de
r
J
udgm e ,a t sCour' Fi ngsofFac a Concus o ofLa The cvi monea y
nt nd hi
ts ndi
t nd
l i ns
w.
i l
tr
pe ly o i tons de c i d i t s s ton B. e r e r d t i t s Or a t ICM P
na t blga i
s rbe n hi ec i
ar ef r e o n hi der s he C
Oblg i '
i aton.
'

Dee a t s al yterCMP Ob iai , u po tj d me t nee t wi n
fnd ns h lpa h i
lg ton pls s-u g n i tr s, t
hi
tn( 0)da oft daeoft e r oft sOr r ft CMP Oblgai i notpai i f l
e 1 ys he t he nty hi de .I he
i ton s
d n ul

wi i tn( 0 d y o t ed t o e tyo ti Or e,h npo tj d me t ne ets ala cueo
t n e 1 ) a s f h ae f n r f hs d r te s-u g n itr s h l c r n
h
t CM P Oblg ton begi ng on t da e ofe r oft s Or a s lbe de er i by
he
iai
nni
he t
nty hi der nd hal
t m ned

usngt Tras yBilrt prvaii ont daeofenr oft sOr rpu s t 28U. C.j
i he e ur l ae e lng he t
ty hi de ruant o
S.
1 ( )
961 2006 ,
4.

D e knda ss l pa t rCM P O blga i by e e toni f
f
nt ha l y hei
i ton
l c r c unds t a f ,U .
r ns er S.

pos a m o or r ce tfe c c ba ca hi r sc k,orba m one or . I pa e i t
t l ney de , rii d he k, nk s e ' hec
nk
y der f ym nt s o
b m a ot t n by e ec r c f
e de her ha
l toni unds ta f r t n t pa e s l be m a pa bl t t
r ns e , he he ym nt ha l
de ya e o he
Com m odiy Fut esTr di Com m i s on a s ntt t a es be ow :
t
ur
a ng
s i nd e o he ddr s l

6

Com m odiy Fut e Tr di Com m i s on
t
ur s a ng
si
Di s on ofEnt c m e
vi i
br e nt
A TTN : Acc
ount Rec i bl - A M Z 340
s e va es
E- ai Box: 9- C- M Z- Rm l
AM A
A CFTC
DO T/ A/ M A C
FA M
6500 S. a t Bl
M cArhur vd.
Okl hom a Ciy,OK 731
a
t
69

Teephone:( 954- 44
l
405) 56
I pa
f ymen by e e toni f
t l cr c undsta f i c e t pa ng Defnda s lcont tNi
r nser s hos n, he yi
e nt hal
ac kki
G i on o he s e s a t a es a
bs r r ucc s or t he ddr s bove t r ce ve pa enti tuc i and s l f l
o e i
ym
nsr tons
ha l uly

c pl wih t ei tuc i . Def nda ss l a co pa payme oft CM P Oblga i
om y t hos nsr tons
e nt hal c m ny
nt he
i ton
wih a c rltert ti ntfe De e nt a t na ea docke numbe oft spr e ng.
t ove e t ha de ii s f nda s nd he m nd
t
r hi oce di
Def nda ss l s m u t ne l ta m i c e oft cove l te a t f m ofpaym entt
e nt ha l i la ous y r ns t opi s he
r e t r nd he or
o

t ChifFi ilOfi e ,Comm o t Fu ur sTr ng Comm ison,Thr e La a te Ce r ,
he e nanca tc r
diy t e adi
si
e f ye t nte
11 21 tSte , W , as ngt D . 20581
55 s r et N
W hi on, C.
.
Pa ta Sa i f c i A ny a e a e by t Com m i s on o t M oniorofa
ri l ts a ton:
cc pt nc
he
s i r he
t
ny

pa ta p
ril ayme ofDef nda s Resiuton Oblg i orCM P Oblg i s lnotbedee
nt
e nt' tt i
i aton
i aton hal
med a
wave ofDef nda s oblga i t makef t pa
i r
e nt ' i tons o
urher ymen spu s
t r uantt t sOr r ora wai r
o hi de ,
ve
01t Com m i son' r g t s e t c pelpa e ofany r m a ni ba anc
.
7he
s i s i ht o e k o om
ym nt
e i ng l e.
11
1.

M I ELLAN EO US PR O V I O N S
SC
SI

Notc Al notce r quiedt begi n by a pr son i t sOr s lbe
ie: 1 i s e r o
ve
ny ovii n hi der hal
s nte a la by c r ii d m a l r t ' r ce ptr que t a f l w s'
e m i nd
e tfe
i, e ul e i e s ed, s olo .
n
N o i t Com m i s on'
tce o
si .

RosmayHoli r(t-oli ricfc.ov)
e r
lnge ll lngerl t k
l
i y
Deput Di ect
y r or
U . Com m odiy Fut esTr di Com m i s on
S.
t
ur
a ng
si
525 W .M onroe,Suie 1100
t
Chi ag llnoi 60661
c o, li s

7

N o iet D e e
tc o f ndan Robe tEs obi
t
r c o:

P trHo r( l mev h meb n e .o
ee me Plo rt o r o n rc m)
Hom erBonner
1200 FourSeas Tow er
ons
1 41 Br c l A ve
4
i ke l nue
M i m i FL 3 31
a ,
31

N o i e t De e nt Sout n Tr tM e al ,I .a Lor l Ove s s Cop .
tc o f nda s
her us
t s nc nd
e ey
r ea
:

J s Ori (o tzlh ro otzc m)
o e tz lriqzer n ri.o
'
He on Ori
r
tz
25 Al m br Cice,Suie 1 60
5 ha a r l
t 0
Cor lGabl ,FL 331
a
es
34

N otc t t M onior
i e o he
t :
D a elD rs ol
ni
ic l
Exe utve V i Pr i nt COO
c i
ce es de ,
N a i na Fut esA s oci ton
to l ur
s ai
300 Sout Ri r i Pl za Suie 1
h ve s de a , t 800
Chi go,Ilnoi 60606ca li s
3447
A 1 s notc t t Co m i s on s l r f r nce t na e a do tnum beroft sa ton.
1 uch i es o he m s i ha l e e e
he m nd cke
hi c i

2
.

Co tn igJ rs ito o t sCo r:Th sCo r s l rti j idcino t s
ni un u idcin f hi u t i u t hal ean urs ito f hi

a i t e ur c pla w ih t s Or a f al ot rpur es r l t d t t sac i
cton o ns e om i nce t hi der nd or l he
pos e a e o hi ton.
I .
V

C O N CL USI N
O

Theebengnoj tr a onf deay,heClr oft Co ti hee die tdt e e
r i
us e s or l t ek he ur s rby r ce o ntr

ti Or e o Pema e tlj n t n, vl o eayPe at , n Ote Eq tbl Reifa ans
hs d r f r n n nu ci CiiM n tr n l a d h r ui e le g i t
o
y
a
De e
f ndan sass tf t i t sOr r
t
e orh n hi de .
D O N E AN D O R DER ED i c m be s a t J m e La r nce K i Fede a J tc
n ha r t he a s w e
ng
r l us i e

Buidi a Unied St t sCou t ei M im i Fl i t s29t da ofAugus 201 .
l ng nd t
ae
rhous n a , orda, hi h y
t 6

w y,
y
-M

Jam es Law r
ence K ng
U nie St t s Di t i tCour J
t d a e sr c
t udge

c Al c
c: l ouns ofr cor
el e d
8