Federal Court Issues Emergency Order Freezing Assets and Protecting Books and Records
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that on March 24, 2014, Judge Sidney Stein of the U.S. District Court for the Southern District of New York (Manhattan) issued an emergency Order freezing and preserving the remaining pool participant assets under the control of Michael James Seward, Yan Kaziyev, and their company SK Madison Commodities, LLC (SKMC), a Commodity Pool Operator based in New York City. The Order also freezes assets controlled by a successor company, SK Madison, LLC, prohibits Seward, Kaziyev, and SKMC from destroying books and records, and allows the CFTC immediate access to those records.
This emergency Order is part of a CFTC enforcement action filed on March 24, 2014. The CFTC Complaint alleges that, from as early as October 2010, Seward and Kaziyev, by and through SKMC (collectively, Defendants), fraudulently solicited more than $1.3 million from members of the public to trade futures in a commodity pool by, among other things, misrepresenting their trading practices and historical trading returns. The Complaint further alleges that the Defendants prepared and distributed to pool participants false account statements and performance reports showing huge profits, while at the same time Defendants were losing money trading futures and diverting large amounts of pool participants’ funds for Defendants’ own use. In addition to fraud, the Complaint alleges that the Defendants committed certain registration violations.
In its continuing litigation, the CFTC seeks full restitution to defrauded pool participants, disgorgement of any ill-gotten gains, the payment of appropriate civil monetary penalties, permanent registration and trading bans, and a permanent injunction from future violations of federal commodities laws, as charged.
The CFTC appreciates the cooperation of the U.S. Marshals Service, Middle District of Florida, Tampa Division, in this matter.
CFTC Division of Enforcement staff members responsible for this case are Daniel Jordan, Michael Loconte, Erica Bodin, Matthew Elkan, and Rick Glaser.
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CFTC’s Commodity Pool Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Commodity Pool Fraud Advisory, which warns customers about a type of fraud that involves individuals and firms, often unregistered, offering investments in commodity pools.
Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.