Georgia Court Imposes Fines and Other Sanctions Against Atlanta-Based Saxon Financial Services Inc., Charged by the CFTC with Commodity Option Fraud

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC CFTC The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss Read this Term) today announced that it obtained more than $4.3 million in civil monetary penalties and equitable relief in an order against Saxon Financial Services Inc. (Saxon) of Atlanta, Ga., charged by the CFTC in 2007 with commodity option fraud.

Judge Julie E. Carnes, Chief Judge of the U.S. District Court for the Northern District of Georgia, entered a final order of judgment requiring Saxon to pay a civil monetary penalty of $3,289,434 and disgorgement totaling $1,096,478, plus post-judgment interest. The order also permanently bans Saxon from any commodity-related trading.

The order stems from a CFTC complaint filed on October 3, 2007, that charged Saxon with fraud in connection with off-Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term unleaded gas, heating oil and foreign currency options contracts. The complaint alleged that Saxon used high-pressure telemarketing sales tactics to solicit customers in Canada and English-speaking countries in Europe to purchase off-exchange options on these commodities. Saxon allegedly promised customers that large profits could be made by following the “could not lose” trading recommendations made by the firm. However, in fact, customers lost virtually all of their invested money trading through Saxon (see CFTC News Release 5407-07, October 31, 2007).

The CFTC thanks the Alberta Securities Commission, Quebec’s Autorite des Marches Financiers, the New Brunswick Securities Commission, the Saskatchewan Financial Services Commission, BaFin, the U.S. Attorney’s Office for the Northern District of Georgia and the U.S. Marshals Service in the Northern District of Georgia for their significant assistance in this matter.

The following CFTC Division of Enforcement staff members are responsible for this case: Ken Koh, Todd Kelly, Peter Haas, Paul Hayeck and Joan Manley.