Free Motion for Miscellaneous Relief - District Court of Arizona - Arizona

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Plaintiff COMMODII'Y UTURETRADING OMMISSION F S C T i m o t h J .M u l r e a n y y ChiefTrialAnomey Md. Fed.BarNo.(08262) Robert Hildum J. Trial Attorney Louisiana No. 2 | 296 Bar Division Enfbrcerrent of '' Street, I I 552l NW Washington, C. 2058 D. | (202) l 8-5000 4 IN THE UNITEDSTATESDISTRTCT COURT IN AND T'ORTHE I)ISTRICTOF ARIZONA COMMODITY FUTURES TRADING COMMISSION, l,laintiff,

C A S EN O . :C I V 0 3 - 1 8 2P H X 6 PGR

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INTERNATIONAL UNDIN(; F ASSOCIATION, al. et
Dfenda ts. n

CONSENT ORDEROF PERMANENT INJUNCTION, MONETARYJUDGMENTAND O T H E RE Q U I T A B L E E L I E F R AGAINSTDEFENDANTS RONALDSTEPHENHOLT, ET AL.

Defendants RonaldSteven Holt (,,Holf,),International Funding Association ("IFA"), Cambridge GlobalGroup("Cambridge"), GlobalManagement and Group ("Global")(collectively "Defendants"), the havingsigned theirConsent this to
coNsENTORI)ER ptlRntANt_NINJINCI tON.MONtr ARy JIIDcMEN AND OTHER OF I I I EQIITfABLE RELIEF
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Case 2:03-cv-01826-PGR

t,,. Document I109-3

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rvhichConsent has and AncillaryReliel-("Order"), Injunction OrderofPermanent to it by herein reference, appears the beenfiled with the Courtand in incorporated Court that: I. INTRODUCTION Futures TradingCommission 18, On September 2003,the Contmodity

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llolt RonaldSteven in filed a Cornplaint this civil actionagainst 7 ("Commission") 8 9 l0 ("lFA"). Cambridgc GlobalGroup FundingAssociation ("Holt"), International seeks Group("Global"). l'he Complaint ("Cambridge"), ClobalManagenlent and provisions ofthe ofthe antifraud relief ,br violations andotherequitable injunctive "Ac1"), 7 U.S.C I er seq.(2002),andthe Act Exchange (the {i Commodity

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seq (2004) ln a related l thereunder,7 C.F R. $ 1.1<'t promulgated Regulations ("SF-C") filed Sec'tittesqnd Corrrmission and action, Securities Exchange the Holt, et al ,Case No : 03 CV 1825' v. ExchanpeCommission RonalclStephen Ilolt andothers On lau'sby Defendant ol'the ledcralsecurities allegingviolations as Orders to Defendants Restraining Statutory Octobeil, 2003,theCourtcntered Globaland IFA. Holt, Cambridge, Il. CONSENTSAND AGREEMENTS withouta trial in alleged the CompJiant of To effectsettlement the r]latterc Clobaland IFA (collectively and Holt individually, Carnbridge, on the merits,
IQTJITABLE AND JI.JDGI\ltJNT OTIIER MONETARY INJI]NCTION. OF ORDER PERMANENT CONSENT RELIF]F

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Case CFTa\\

2:03-cv-01826-PGR. - \ t , ,Documenti :109-3 t,,rr '1,1t t a t ttnli".! t l"t.tilti'trrl

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herebv: referredto hereinas the "Def'endants") I. Injunction Consent10the entry of this ConsentOrder of Permanent

3 and Other ReliefAgainst Defendants RonaldStephen Holt, et al. ("Order "); 4 5 6 7 herein; Order,otherthanas setfonh specifically 8 3. 9 IO to 6c of this actionpursuant Section ofthe Act,7 U.S.C.$ l3a-l (2002); overthemand the subject matter Admit thatthis Courthasjurisdiction 2. haveagreedto this Order voluntarily, and Affirm that the Defendants

by or that no promise lhreathasbeenrnade the Commission any member, or thereof,or by any person,to induceconsentto this oflicer, agentor representative

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properly with thisCourt pursuantto 6c lies Section Admitthatvenue

(2002), . l 2 o f t h eA c t ,7 U . S . C$ l 3 a - l
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Waive:

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(a) all claimsthatthey may possess to Act,5 underthe EqualAccess Justice

(2000) 28U.S.C. 24l2 (2000); l 5 U.S.C. 504 and $ $
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(b) anyclaimof Double upon institution the ofthis Jeopardy based

l 7 proceeding theentryin thisproceeding imposing civil moneiary a ofanyorder or
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INJUNCIoN. MONLIARYI UDGI\,1ENT OTHER ] AND EQUITABLE ORDER PERMANENT OF CONSENT RELIEF
('FT(-rs .t trl r\: lhtrr.uti.,rtl l lDth,t: 1\\,\'irnnt Case 2:03-cv-01826-PGR Document 109-3 \

penalty anyotherrelief;and or
( c ) a l l r i g h t s f a p p e a f r o mt h i sO r d e r : o l

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j of ofthis Courtfor thepurpose to Consent the continuedurisdiction

ofthis Orderand for any otherputposes the enforcing termsandconditions to relevant this case; 7. or employees nor the Agreethat neither L)ei'endants theiragents'

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actingundertheircontrolshalltakeany actionor rrakeany public representatives or in any allcgations tlreConlplaint directlyor indircctly, denying, statement is that the to creating tending create impression the Complaint withoutfactual or the shallafl'ect thatnothingin this provision provided, however, basis;

9 l0 ll in or obligations, ii) rightto takelegalpositions other i) Defendants': testimonial will is to proceedings whichthe Cornrnission not a party. l'he Defendanti

and employees reprcsentatives thatall oftheir agents' to all steps assure l 2 undertake and t 3 understand complyrviththis agrcetnent.
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neither admit to By consenting the entryofthis Order'the Defendants

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n t s of t n o rd e n yt h ea l l e g a t i o n s t h eC o m p l a i no r t h eF i n d i n g o l ' F a c c o n t a i n eid l h i s

and agree l 6 Order,except tojurisdiction the and venue However' l)efcndants as t 7 intendthatthe allegations ofFact madeby and ofthe Contplaint all ofthe Findings l8 l9 20 2l 22
EQUITABt-E ANI) OTHI]R lNJtiNa TION MOfllil ARYJUI:'CMINT OF ORDER PhRl\'lANENT CONSENT RELIEF
l'f7-t\ | ! '!ti t ltt.ttl,tr,rrrlr,'tl,': 1 Case 2:03-cv-01826-PGR " , . : Document\ 109-3

in this Courtandcontaincd Partlll ofthis Ordershallbe takenastrueandcorrect ofany effect,withoutfunherproof in the course and be givenpreclusive filed by, on behalfol' or againstany Defendant, bankruptcyproceeding subsequent relating the to this Order,or any otherproceedir'1g to or any proceeding enfbrce

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govemed the Act. A by capacities to ofthe Defendants act in various fitness filed by, on behalfof, noticeofany bankruptcy shallprovideimmediate Defendant by in required PartVI ofthis Order. No the or against Defendant the manner to provision ofthis Ordershallin any way lirrit or impairthc abilityofany person or in against Defendants any otherperson any remedy seekany legalor equitable other proceeding.

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is in finds fully advised thepremises, thatthere good TheCoun,being

for cause theentryofthis Orderandthatthereis nojust reason delay. The for Conclusions Lawanda of of of the directs entry Findings Fact, Courttherefore pursuant Sectibn ofthe to 6c relief, equitable permanent injunction ancillary and as Act,7 U.S.C. l3a-l (2002), setfofthherein. $

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III. S O F I N D I N G S F F A C TA N D C O N C L U S I O NO F L A W A. FINDINGSOF FACT j and over matterurisdiclion thisaction the subject 10. ThisCourthas

l 7 allegations theComplaint ofthe Act,7 U.S.C. l3apursuant Section to 6c(a) in $ IE l9 20 2l 22
r EQUITABLE I IoN. MONLTARY JUDGMhN AND OTHER or TNJLJNC ORDER PERI\lANLNT CONSENT RELIEF
tt"i ltrl t) < CCase\ 2:03-cv-01826-PGR\ ' \ : t tDocument! 109-3 FT(- r lht4n.ti.nrl tttnhn. t\

t(a) (2002). I l, pursuant to personaljurisdiction theDefendants over ThisCourthas

(2002). 6c(a) ofthe Act,7 U.S.C. l3a-1(a) rr Section

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to 6c Venueproperly lieswith this Coufl pursuant Section ofthe Act,

Defendants resided andtransacted in business 7 U.S.C.$ l3a-l(e) (2002). because in the Districtof Arizona. 13. is The Commodity FuturesTrading Commission an independen(

that is charged with responsibility administering for and federal regulatory agency 7 the ol'thc Act. as amended, U-S.C. 1 et seq.(2002),and enforcing provisions $$ promulgated the Regulations thereunder.

8 14. 9 l0 lt placeofbusiness 9201N. 29'h its as whichdesignates principal corporation with the AZ. IFA hasneverbeenregistered Phoenix, Avenue,Suite63-336, Inc. ("IFA") is an Arizona InternationalFunding Association'

in t 2 Commission any capacity. l3 15. s C a m b r i d g c l o b a lG r o u p ,I n c . ( " C a r n b r i d g ei" )h e l do u t b y t h e G

of law trusttbrmedunderthe lawsofthe Commonwealth as t 4 defendants a comnron with in t 5 the Bahamas. has Cambridge neverbeenregistered the Conrmission any t 6 capacity. t7 l8 l9 20 2l 22
INJtINC .i.MONl,lARYltrl)CMIiNI ANI) OIHIR EQTJITABLE llO CONSENT ORDIR OF PLRMANENI RELIEF
r",,1')t C F T I - ( 2:03-cv-01826-PGR- , ' , ,Document 109-3 t. t. Case l n l ( i D t t i . n t r lt r n ' , h , . 1 .

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Group ("Global")is heldout by the defendants Global Management

placeofbusiness as its Globaldesignates principal to be an Arizonacorporation. AZ. Globalhasneverbeenregistered 4212W. Cactus Road,SuiteI | 10,Phoenix, in with the Commission anycapacitl

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, , t o R o n a l dS t e p h e nl o l t ( " H o l t " ) , f M e s aA r i z o n ah a sh e l dh i m s e l f

sinccat least1997. Ile is also ol'lFA. GlobalandCanrbridge out asthe manager trustee control or as with associated thevarioustrusts eitlterthcir bcnelrciary, in rviththe Conttnission any capacity. person.Holt is not registered 18. IFA, Cambridge Globalto and dcfendants Dcfendant Holt founded

prccious metals andother contracls commodities. on in solicitinvestments futures 7 instruments. 8 19. 9 l0 ll t2 and principal brokerol' lFA, Clarnbridge, Global,andhad personal manager and/or an s s k n o w l e d go f a l l o f t h e b u s i n c sa c t i v i t i eo 1 ' l [ A ,C a n r b r i d g e dG l o b a l . e 20. person lFA, of Holt tintcs.Dc'l'endant rvasa controlling At all relevant llolt as Del'endant acted an officer,director, at Since least1997,

and l 3 Cambridge, Clobal. 21. solicited tiaudulently Def'endants Between1997and200,1,

to totalingapproximately million to $25 l 5 approximately 2,500pcrsons sendl'unds l 6 bankaccounts ofengagingin investments by for controllcd I)el'endants the purposc l7 t8 t9 20 21 rely on these intended cachofthe 2.500persons that matter.Del'endants 22
AND OTHIIR IQUlTABLE l l\IUNC I loN. l\4oNh ARYJLiDCVENT CONSTNT ORDER I'l:Rtl|ANLNT Of RELIEF
( -Case 2:03-cv-01826-PGR , \ t . : t : , t r , I t i t , . 109-3 L t ( t \ t n l r a r n l t , r t t lt l , , , l : , r 1 " Document , .

plecious metals andotherinstruments. on contracts contmoditics, in futures abouteanlingtremendous to customers madernisreprcsentations Defendants prolits,knowingsaid profits,with little to no risk rvithguaranteed fbr dislegard thetruthofthe u'ere misrepresentations falseor madewith reckless

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fraudulent regalding isrcpresentations nr ol'profit andrisk ofloss as solicitations 2.500pcrsons reliedon Defendants detailed belorv.Most,ifnot all, ol'thcse fraudulent misrepresentalionsscndiundsto bankaccounts to controlled Holt by for of-engagimg investments futures in in andthe otherDefendants the purpose precious on mctalsandothcrinstrunrents. contract commodities. 22. Delendants mademisreprcsentations to customers about In addition,

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investment and falseaccount statements customers. to Dast Derlbrmance issued 23.
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were knewthatthcsemisrepresentations falseandthat Defendants

when misrcpresentations investing. relieduponthese customers 24. had ofactually customers anyexpectation Noneofthe participating

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contntodity. t 2 takingdeliveryof any

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needlbr the customers any cornmercial had Noneol'thc participating

or commodities, did theyhavethe abilityto handle storeany of the nor l 4 subject l 5 subject corrmodities. l6 26. rely that Det'endants intended customers uponthe falseand fiaudulent

l 7 representations madeto customers. Defendants t8 t9 20 2l expenses. Defendant Holt fbr his personal 22
Er"TAND oI HIiRllQUITABLE I JNcI ION.MONtTT\R JtJDGM Y ORDER PLRNIANl:NlNJt OF CONSENT RELIEF
afT( lnt',ttt,,rtl t't1.1,)t': Case 2:03-cv-01826-PGR \\ t\\\t.r"i rr Document 109-3 I I x

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of theneither fundsto a series trusts, divcrtcdcusionrer Defendants

controlled by domcstic offshore and accounts thosefundsto various translerred by to convefted cashandrrisappropriated Holt, or the lundsrvere Defendant

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did Defendants not iorq'ard fundsto any clearing firm and/or

and firm for tradingon behalfo f customers havefailedto provideany investment on were purchased behalfof evidencethat any foreign currencyfuturescontracts customers. 29. they purportedto ofler were knew that the contracts Defendants

illegal futurescontracts. 30. of were by Fundssolicited Def'endants usedto fund the purchase

8 other art vehicles trailers, works'gold coinsand various and real residential estate, 9 l0 ll Holt, his family of use items,for the personal and enjoyment Defendant personal and friends.

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to fromcustomers purchase funds solicited also Defendants used

Holt, his solelytbr thebenefitof Defendant contracts futures foreigncurrency 'familyandfriends. between at $25 solicited least millionfromcustomers, 32. Defendants 1997and2003. to transferred werepersonally funds in $3 33. At least rnillion custonler $22 Holt. by bankaccounts Defbndant andtheremaining millionwas offshore person IFA, of llolt. of at solicited thedirection Defendant asthecontrolling from by and Cambridge Global.Of the525millionsolicited theDefendants

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EQUITABLE AND OT}IER MONITARYJUDCMENT INJUNCTION. OF ORDER PERMANLNT CONSENT REI-IEF
tr,' 'I tt t' ' \ aCases2:03-cv-01826-PGR' w " h Document \ 109-3 l:1( t l,ttrnrtitr\tl ltttt.t',. t

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by the to has at customers, least$ l'1.406.251.00 not beenretumed customers and/orcontrolofthe Defendants' in and defendants, remains the possession B. CONCLUSIONS OF LAW 34. rnisrepresentatlons' Holt madematerial Defendant Sinceat least1997.

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fundsfrom and accepting facts'whitesoliciting material and failedto disclose futures tradingof foreigncurrency in to retailinvestors engage spcculalive Holt L)efendant hasviolated conduct, By contracts. virtueof this 1l'audulcl'lt

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a) (iii)(2002) 4 ) S e c t i o n b ( a X 2 X ia n d( i i i ) o f t h e A c 1 '7 t J . SC A 6 b ( a ) ( 2 ) ( i n d 35. b c d Il B e c a r r s eo l t d i r c c t l y o n t r o l l ea l l t h es i g n i l i c a n tu s i n e s s '

of aspects tl;A, GlobalarrdCarlbridgcandknowingly financial ancl marketing

4(bxa)(2xi)and(iii) ofthe of violatiorrs Section tl.!ese the actsconstituting t 2 induced
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EQt]ITARI-t LI !ON.N1()N ARY ]TIDGMfNTAND OTHI]R OF OR])I:R I'liRNIA\tNT IN.II]N('I CONSI]NT REI-ILF

person llolt is thecontrolling Defendant and Act, 7 U.S,C.$6b(aX2Xi) (iii) (2002), of lbr of lFA, GlobalandCarnbridge purposes Section| 3(b) of the Act' 7 U S C $ l 3 c ( b )( 2 0 0 2 ) , 36. person ollFA, Globaland lk)lt. asthe controlling Defcndant

of violations Section is Cambridge, liablelbr IFA. ClobalandCambtidge's to and(iii) ofthe Act. purstrant Sectionl3(b) ofthe Act, T lJ S C' 4b(a)(2Xi) $ l 3 c ( b )( 2 0 0 2 ) . 37. through II'A' Dct'endants Globaland Carr.rbridge, Sinceat least1997.

ol' the confirmed execution I-lolt,haveolIeredto enterinto,executed. Defendant

Case 2:03-cv-01826-PGRr ' \ ' r Document' !109-3 lr r'r:irI / r// t t t 1 ! ( n | d 1 t , t rl ! i , , / ' , r ' r Ctta\\

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