U.S. Commodity Futures Trading Commission v. CIS Commodities, LLC et al

Filing 9

STATUTORY RESTRAINING ORDER. FURTHER ORDERED that should any defendant wish to file a memorandum of law or other papers in opposition to Plaintiff's Motion for Preliminary Injunction, all papers shall be filed on or before 7/8/11. Any Reply by P laintiff shall be filed and served by 12:00 noon on 7/11/11. FURTHER ORDERED that Plaintiff's Motion for Preliminary Injunction is set for hearing on 7/12/2011 at 02:00 PM in LV Courtroom 7D before Judge Gloria M. Navarro. FURTHER ORDERED that this Statutory Restraining Order shall be served upon Defendants not later than July 5, 2011. Signed by Judge Gloria M. Navarro on 6/30/11. (Copies have been distributed pursuant to the NEF - MMM)

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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEVADA

U. S. COMMODITY FUTURES
TRADING COMMISSION,
Plaintiff,

2:11-cv-01069-GMN-GWF
2:11-cv-01069-GMN
Civil Action No: _________ -GWF

vs.
Hon.___________________
CIS COMMODITIES LLC,
ALLEN NICHOLAS WARD,
TRANS GLOBAL INVESTMENTS, LLC
and
CHARLES LEROY TIMBERLAKE,
Defendants.

[PROPOSED] STATUTORY RESTRAINING ORDER
Having read Plaintiff’s Complaint for Injunctive and Other Equitable Relief and for Civil
Monetary Penalties Under the Commodity Exchange Act (“Complaint”), Motion for a Statutory
Restraining Order (“Motion”), Plaintiff’s Memorandum of Points and Authorities in Support of
Its Motion for Statutory Restraining Order and Motion for Order of Preliminary Injunction
(“Memorandum”), and the Appendix to Plaintiff’s Memorandum (“Appendix”), and the
Defendants having been given telephone notice of the Motion and an opportunity to be heard,
THIS COURT HEREBY FINDS:
1.

This Court has jurisdiction over the parties and subject matter of this action

pursuant to the Commodity Exchange Act (the “Act”), as amended by the Food, Conservation,
and Energy Act of 2008, Pub. L. No. 110-246, Title XIII (the CFTC Reauthorization Act of 2008
(“CRA”)), §§ 13101-13204, 122 Stat. 1651 (enacted June 18, 2008) and the Dodd-Frank Wall

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Street Reform and Consumer Protection Act of 2010, Pub. L. No. 111-203 (“Dodd-Frank Act”),
Title VII (the Wall Street Transparency and Accountability Act of 2010), §§701-774, 124 Stat.
1376 (enacted July 21, 2010) to be codified at 7 U.S.C. §§ 1 et seq.
2.

This Court is authorized by Section 6c(a) of the Act, 7 U.S.C. § 13a-1(a), to issue

a statutory restraining order against defendants CIS Commodities LLC (“CIS”), Allen Nicholas
Ward (“Ward”), Trans Global Investments, LLC (“Trans Global”) and Charles Leroy
Timberlake (“Timberlake”) (collectively “Defendants”).
3.

Venue properly lies with this Court pursuant to Section 6c(e) of the Act, 7 U.S.C.

§ 13a-1(e).
4.

It appears to the satisfaction of the Court that there is good cause to believe that

Defendants have engaged, are engaging, or are about the engage in conduct in violation of the
Act, as amended, and the Commission Regulations (“Regulations”) promulgated thereunder,
17 C.F.R. §§ 1.1 et seq. (2011). Specifically, there is good cause to believe that Defendants have
engaged, are engaging, or are about to engage in conduct in violation of Section 4b(a)(1)(A)-(C)
of the Act, as amended, to be codified at 7 U.S.C. § 6b(a)(1)(A)-(C); that defendants Trans
Global Timberlake and Ward have engaged, are engaging, or are about to engage in conduct in
violation of Section 4o(1)(A), (B) of the Act, 7 U.S.C. § 6o(1)(A), (B); that defendants CIS and
Ward have engaged, are engaging, or are about to engage in conduct in violation of Regulation
1.57(c), 17 C.F.R. § 1.57(c) (2011); Ward is liable for CIS’s violations, and that Ward and
Timberlake are liable for Trans Global’s violations as controlling persons, pursuant to Section
13(b) of the Act, 7 U.S.C. § 13c(b); and that CIS is principally liable for the acts constituting
Ward’s violations, and that Trans Global is principally liable for the acts constituting Timberlake

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and Ward’s violations, pursuant to Section 2(a)(1)(B) of the Act, 7 U.S.C. § 2(a)(1)(B), and
Regulation 1.2, 17 C.F.R. § 1.2 (2011).
5.

It appears to the satisfaction of the Court that there is good cause to believe

Defendants’ violations of the Act and Regulations are likely to continue unless they are
restrained and enjoined from committing further violations.
6.

It appears to the satisfaction of the Court that there is good cause to believe that

CIS customers and participants in the a commodity pool commonly known as the “Trans Global
pool” may be cheated and defrauded and immediate and irreparable damage will occur to the
Court’s ability to grant effective final relief in the form of monetary redress due to the dissipation
of customer assets and destruction of books and records unless Defendants are immediately
restrained and enjoined by order of the Court.
7.

Consequently, the Court is satisfied that this is a proper case in which to grant a

statutory restraining order to preserve the status quo, protect public customers from loss and
damage, and enable the Commodity Futures Trading Commission (“Commission” or “CFTC”) to
fulfill its statutory duties.
DEFINITIONS
For the purposes of this Order, the following definitions apply:
8.

The term “assets” means any legal or equitable interest in, right to or claim to any

real or personal property, including, but not limited to, chattels, goods, instruments, equipment,
fixtures, general intangibles, effects, leaseholds, mail or other deliveries, inventory, checks,
notes, accounts, credits, receivables, lines of credit, contracts, insurance policies and all cash,
wherever located.

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9.

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The term “document” is synonymous in meaning and equal in scope to the usage

of the term in Fed. R. Civ. P. 34(a) and includes, but is not limited to, writings, drawings, graphs,
charts, photographs, audio and video recordings, computer records and other data compilations
from which information can be obtained and translated, if necessary, through detection devices
into reasonably usable form. A draft or non-identical copy is a separate document within the
meaning of the term.
10.

“Defendants” means CIS Commodities LLC (“CIS”), Allen Nicholas Ward

(“Ward”), Trans Global Investments, LLC (“Trans Global”) and Charles Leroy Timberlake
(“Timberlake”), as well as any persons insofar as they are acting in the capacity of Defendants’
agents, servants, successors, employees, assigns and attorneys, and all persons insofar as they are
acting in active concert or participation with Defendants who receive actual notice of this Order
by personal service or otherwise.
RELIEF GRANTED
STATUTORY RESTRAINING ORDER
I.

ASSET FREEZE

IT IS ORDERED that Defendants, all persons insofar as they are acting in the capacity
of Defendants’ agents, servants, successors, employees, assigns, and attorneys, and all persons
insofar as they are acting in active concert or participation with Defendants who receive actual
notice of this Order by personal service or otherwise, including email, facsimile, and UPS or
other commercial overnight service, are restrained from directly or indirectly withdrawing,
transferring, removing, dissipating, concealing, or disposing of, in any manner, any funds, assets,
or other property, wherever situated, including, but not limited to, all funds, personal property,

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money, or securities held in safes or safety deposit boxes and all funds on deposit in any
financial or brokerage institution, futures commission merchant, bank, or savings and loan
account held by, under the actual or constructive control of, or in the name of Defendants since
May 2007. The assets affected by this paragraph shall include both existing assets and assets
acquired after the effective date of this Order.
II.

PROHIBITION AGAINST DESTRUCTION OF BOOKS AND RECORDS
IT IS FURTHER ORDERED that Defendants, all persons insofar as they are acting in

the capacity of Defendants’ agents, servants, successors, employees, assigns, and attorneys, and
all persons insofar as they are acting in active concert or participation with Defendants who
receive actual notice of this Order by personal service or otherwise, including email, facsimile,
and UPS or other commercial overnight service, are restrained from directly or indirectly
destroying, mutilating, concealing, altering, or disposing of any documents that related to the
business practices or business or personal finances of the Defendants.
III.

CFTC ACCESS TO AND INSPECTION OF BOOKS AND RECORDS

IT IS FURTHER ORDERED that Defendants, all persons insofar as they are acting in
the capacity of Defendants’ agents, servants, successors, employees, assigns, and attorneys, and
all persons insofar as they are acting in active concert or participation with Defendants who
receive actual notice of this Order by personal service or otherwise, including email, facsimile,
and UPS or other commercial overnight service, are restrained from directly or indirectly
refusing to permit authorized representatives of the Commission to inspect, when and as
requested, any books and records, documents, correspondence, brochures, manuals,
electronically stored data, tape records, or other property of Defendants, wherever located,

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including, but not limited to, all such records concerning Defendants’ business operations and
Defendants’ business or personal finances.
IV.

FURTHER VIOLATIONS OF THE ACT RESTRAINED

IT IS FURTHER ORDERED until further order of this Court that:
A.

Defendants CIS and Ward are restrained, enjoined, and prohibited from directly

or indirectly violating Section 4b(a)(1)(A)-(C) of the Act, as amended, to be codified at
7 U.S.C. § 6b(a)(1)(A)-(C), and Regulation 1.57 (c), 17 C.F.R. § 1.57(c)(2011);
B.

Defendants Trans Global and Timberlake are also restrained, enjoined, and

prohibited from directly or indirectly violating Section 4b(a)(1)(A)-(C) of the Act, as amended,
to be codified at 7 U.S.C. § 6b(a)(1)(A)-(C) and Section 4o(1) (A), (B) of the Act, 7 U.S.C.
§ 6o(1) (A) and (B); and
C.

Defendant Ward is also restrained, enjoined, and prohibited from directly or

indirectly violating Section 4o(1) (A), (B) of the Act, 7 U.S.C. § 6o(1) (A) and (B).
V.

DIRECTIVES TO FINANCIAL INSTITUTIONS AND OTHERS

IT IS FURTHER ORDERED, pending further Order of this Court, that any bank,
financial or brokerage institution, futures commission merchant, business entity, or person that
holds, controls, or maintains custody of any account or asset owned, controlled, managed, or held
by, on behalf of, or for the benefit of the Defendants, either individually or jointly, or has held,
controlled, or maintained custody of any account or asset owned, controlled, managed, or held by,
on behalf of, or for the benefit of the Defendants, either individually or jointly, at any time since
May 2007, and who receives notice of this Order by personal service or otherwise, including
facsimile, electronic mail, Federal Express and United Parcel Service, shall:

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A.

Prohibit Defendants and any other person from withdrawing, removing, assigning,
transferring, pledging, encumbering, disbursing, dissipating, converting, selling or
otherwise disposing of any such asset except as directed by further order of the
Court;

B.

Deny Defendants and all other person(s) access to any safe deposit box that is: (a)
titled in the name of Defendants, either individually or jointly; or (b) otherwise
subject to access by the Defendants;

C.

Provide counsel for the Commission, within five (5) business days of
receiving a copy of this Order, a statement setting forth: (a) the
identification number of each and every such account or asset titled in the
name, individually or jointly, of the Defendants, or owned, controlled,
managed, or held by, on behalf of, or for the benefit of the Defendants:
(b) the balance of each such account, or a description of the nature and
value of such asset as of the close of business on the day on which this
Order is served, and, if the account or other asset has been closed or
removed, the date closed or removed, the total funds removed in order to
close the account, and the name of the person or entity to whom such
account or other asset was remitted; and (c) the identification of any safe
deposit box that is either titled in the name, individually or jointly, of the
Defendants or is otherwise subject to access by the Defendants; and

D.

Upon request by the Commission, promptly provide the Commission with
copies of all records or other documentation pertaining to such account or
asset, including, but not limited to, originals or copies of account
applications, account statements, signature cards, checks, drafts, deposit
tickets, transfers to and from the accounts, all other debit and credit
instruments or slips, currency transaction reports, 1099 forms, and safe
deposit box logs.
VI.

BOND NOT REQUIRED OF PLAINTIFF

IT IS FURTHER ORDERED that pursuant to Section 6c(b) of the Act, 7 U.S.C.
§ 13a 1(b), no bond need be posted by the Commission, which is an agency of the United States
of America.
VII.

SERVICE OF THE ORDER

IT IS FURTHER ORDERED that copies of this Order may be served by any means,
including by way of personal service, UPS or other commercial overnight service, email,
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facsimile or pursuant to Fed. R. Civ. P. 5 and Articles 2 through 10 of the Hague Convention,
Service Abroad of Judicial and Extrajudicial Documents, upon any financial or brokerage
institution, futures commission merchant, bank, savings and loan institution, other financial
institution, or any other person or entity that holds any accounts, funds, assets, or other property
of Defendants or that may have possession, custody, or control of any documents of Defendants,
or that may be subject to any provision of this Order. Elizabeth N. Pendleton, William P.
Janulis, Rosemary Hollinger and M. Kenneth Hampton, all representatives of the Commission,
are hereby specially appointed to serve process and/or effectuate service of process, including of
this Order and all other papers in this action.
IT IS FURTHER ORDERED that the United States Marshals Service is directed to
assist the Commission with service of process, including of the Complaint, summons, and all
other papers in this case, as well as assist the Commission with taking control and custody of the
assets, books and records, and business premises of Defendants.
VIII. SERVICE ON THE COMMISSION
IT IS FURTHER ORDERED that Defendants shall serve all pleadings,
correspondence, notices required by this Order, and other materials on the Plaintiff by delivering
a copy to Elizabeth N. Pendleton, Senior Trial Attorney, or William P. Janulis, Chief Trial
Attorney, Division of Enforcement, Commodity Futures Trading Commission, 525 W. Monroe
Street, Suite 1100, Chicago, Illinois 60661.
IX.

FORCE AND EFFECT

IT IS FURTHER ORDERED that this Order shall remain in full force and effect until
further Order of this Court upon application, notice, and an opportunity to be heard, and that this

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Court shall retain jurisdiction over this action to ensure compliance with this Order and for all
other purposes related to this action.
X.

FURTHER COURT HEARINGS

IT IS FURTHER ORDERED that should any defendant wish to file a memorandum of
law or other papers in opposition to Plaintiff’s Motion for a Preliminary Injunction, all papers
shall be filed and served on or before _______________, 2011. Any Plaintiff shall be shall be
July 8, 2011. Any Reply by reply by Plaintiff
by 12:00 noon on July 11, 2011.
filed and served on or before _______________, 2011.
IT IS FURTHER ORDERED that Plaintiff’s Motion for a Preliminary Injunction is set
for hearing on ________________, 2011 at __________ o’clock [AM][PM].
Tuesday, July 12, 2011 at 2:00 p.m. in Courtroom 7D.

IT IS SO ORDERED. this 30th that of June, 2011.Restraining Order shall be served
IT IS SO ORDERED
IT IS FURTHER ORDERED day this Statutory
upon Defendants not later than July 5, 2011.

DATED:

________________________________
IT IS SO ORDERED this 30th day of June, 2011.
___________________________________
Gloria UNITED STATES DISTRICT JUDGE
M. Navarro
United States District Judge
________________________________
Gloria M. Navarro
United States District Judge

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