NEW YORK (Reuters) - A U.S. federal judge has issued a preliminary injunction against Hunter Wise Commodities, to block the company from offering precious metals investments to the public.
The order, issued by Judge Donald Middlebrooks of the Southern District Court of Florida, stems from a Commodity Futures Trading Commission (CFTC) complaint filed last December 5, the top U.S. derivatives regulator said on Wednesday.
The CFTC alleges that Hunter Wise Commodities, based in Las Vegas, had improperly taken in at least $46 million from “hundreds of customers” since July 2011. <ID: nL1E8N5JJT>
Fred Jager, the head of Hunter Wise Commodities, said in a telephone interview the company did not violate any regulations and would file an appeal against the preliminary injunction order.
In a court order, Judge Middlebrooks described Hunter Wise as “the conductor of the orchestra, with the other defendants playing instruments at Hunter Wise’s direction.”
The CFTC said it was seeking a permanent civil injunction against the defendants, in addition to other remedial relief, including restitution to customers.
The CFTC’s complaint showed how the defendants claimed to sell physical metals to retail customers. Customers would make a down payment, and the companies would then arrange loans for the balance of the purchase price.
But these statements were false, and the transactions were just paper deals, the CFTC alleges.
Jager, who was the chief executive of Hunter Wise Commodities until the CFTC assumed control on Monday, said the company had always complied with the rules of the Uniform Commercial Code.
“I do not believe under any circumstances that we have done anything improper,” Jager told Reuters.
In addition, Jager said the company had complied with the CFTC’s requests to provide copies of documents and emails.
The case is United States Commodity Futures Trading Commission v. Hunter Wise Commodities LLC et al, U.S. District Court Southern District of Florida No. 9:12-cv-81311-DMM.
Editing by Clarence Fernandez