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GLOBAL TELECOM, INC
CASE OUTCOME: FINE $220,000, REGISTRATION REVOKED
NFA ID:
0284737
Complaint:
For Release July 18, 2001 CFTC CHARGES CHICAGO AREA RESIDENTS WITH FRAUDULENT PROMOTION OF PORK BELLY TRADING SYSTEM According to the Complaint, a Year's Worth of Service Cost $4,500 and Ads Touted that Customers Could Have Made as Much as 700% WASHINGTON D.C. – The United States Commodity Futures Trading Commission (CFTC) announced today the filing of a five-count administrative complaint alleging that from at least March 1998 through October 1999, several Chicago area residents and their firm committed fraud by using misleading and fraudulent advertising to solicit customers to purchase trading recommendations that were generated by a commodity futures trading system. The complaint alleges that Global Telecom, Inc., a registered commodity trading advisor, and Cameron Ownbey, a principal and registered associated person (AP) of Global Telecom and former AP of RB&H, Financial Services, LP (RB&H), all of Chicago, Illinois, fraudulently solicited customers in connection with the sale of a commodity trading system. As alleged, Global Telecom promoted and offered to the public a pork belly futures trading system, called the Pro-Managed system through advertisements in trade magazines, on the Internet, and free seminars. Global Telecom and Ownbey, the complaint states, made false promises of huge profits and mischaracterized the performance record of the system. According to the complaint, claims that “you could have made 700% with our trading system,” and “learn how we can make you over 300% profit per year on a small investment” were not supported by any track record, and, in fact, the proprietary account that Global Telecom maintained at RB&H consistently lost money trading the system. As alleged, these losses were not disclosed in the advertising of Global Telecom or to its customers or prospective customers. The complaint further alleges that Ownbey and others conducted Global Telecom's business from the offices of RB&H, that all of the customers who purchased the system were solicited to open accounts at RB&H, and that a majority of those customers did so. The complaint states that RB&H was aware of Global Telecom's advertisements, was aware that RB&H and its employees were earning commissions from the trading by customers common to Global Telecom and RB&H, and was required by its procedures to review the Global Telecom advertisements -- but did not do so. The complaint charges RB&H with liability for the fraudulent acts of Ownbey and its other employees with respect to customers common to Global Telecom and RB&H and for failing to diligently supervise its employees in their solicitations of customers to open accounts at RB&H. Decision:
1/17/03 - ALJ Initial Decision entered. Civil monetary penalty to be paide within 30 days after decision becomes final. 10/4/05 - Commission Opinion & Order issued. The revocation of the company's registration, a three year trading ban, and a cease & desist order - sanctions imposed by the ALJ on 1/17/03 and not appealed shall stand. 10/4/05 - Commission Opinion & Order issued. The revocation of Ownbey's registration, a three year trading ban, and a cease & desist order - sanctions imposed by the ALJ on 1/17/03 and not appealed shall stand. 10/4/05 - Commission Opinion & Order issued. Cease & Desist order imposed against RB&H Financial Services by the Administrative Law Judge on 1/17/03 is affirmed.
Source: National Futures Association
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