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Alternative Market Briefing

CFTC seeks to pull registration of fraudulent CTA

Monday, August 27, 2012

Bailey McCann, Opalesque New York: The Commodities Futures Trading Commission (CFTC) is seeking to revoke the registration of Texas-based CTA, Growth Capital Management LLC, following a fraud case being brought against the firm's principals by the regulator. In July, a judge for the U.S. District Court for the Northern District of Texas, ordered that Robert Mihailovich, Sr., the founder of Growth Capital Management pay $9.3m in fines to the CFTC for fraudulently soliciting over $30 million from customers to trade commodity futures contracts and foreign currency (forex). Mihailovich, and his son were both banned from further activities as financial professionals in the same case.

As alleged in the complaint, Mihailovich, Sr. was convicted and incarcerated on federal wire fraud charges, served 27 months, and while on a three-year supervised release, fraudulently solicited and accepted more than $30 million from approximately 93 customers to open managed trading accounts. The complaint also alleges that at the time Robert Mihailovich, Jr. registered Growth Capital Management he failed to disclose his father's involvement in the firm. Mihailovich Sr. also consistently failed to comply with a range of court orders, failed to adequately communicate with regulators and also failed to make required court appearances.

In June, The CFTC had also ......................

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