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For Immediate Release
April 12, 2004
Media Contact:
Kevin Enright 410-576-6357

STATE OF MARYLAND AND U.S. COMMODITY FUTURES TRADING COMMISSION CHARGE MARYLAND RESIDENT ANDREW SILBERSTEIN WITH STEALING INVESTOR FUNDS IN COMMODITY FUTURES SCAM

Attorney General J. Joseph Curran, Jr. announced today that in an action brought by his office’s Securities Division and the U.S. Commodity Futures Trading Commission (CFTC) the Honorable Richard D. Bennett of the U.S. District Court for the District of Maryland, on April 8, 2004, entered a restraining order freezing defendant Andrew Silberstein’s assets. The Court also issued a preliminary injunction barring the defendant from engaging in fraud during the pendency of the civil action. The Court’s orders stem from a joint action filed on March 5, 2004, charging the defendant with misappropriation of customer funds, issuance of false account statements, fraud, and operating an illegal commodity pool. The order also prohibits the defendant from destroying documents. The defendant participated in the proceeding by telephone from Israel.

The complaint charges Andrew Silberstein, a resident of Baltimore, Maryland, with soliciting and accepting approximately $630,000 from at least seven members of the general public to participate in a commodity pool Silberstein operated to trade S & P 500 futures contracts. According to the complaint, Silberstein misappropriated more than $400,000 of investors’ funds to pay for personal expenses, such as his mortgage and his child’s college expenses, and to repay early investors in the Ponzi scheme. The complaint further alleges that Silberstein provided investors with fabricated account statements that showed monthly profits of up to 45.3 percent, despite the fact that Silberstein’s account routinely lost money. One of those account statements showed an account balance in excess of $1 million at a time when the actual account balance was less than $27,000. “This action is an excellent example,” remarked Curran “of how state and federal authorities, working cooperatively, can together take action to shut down a fraudulent scheme and protect investors from losing additional money.”

In the ongoing litigation, the State of Maryland and the CFTC seek a permanent injunction against Andrew Silberstein, repayment of ill-gotten gains and customer losses, and monetary penalties.

Attorney General appreciates the cooperation of the CFTC in this matter. Curran reminded investors to call the Securities Division at 410-576-6360 before they invest to find out whether their investment adviser, broker and securities are registered. Even when an investment program looks reasonable and investors trust the promoter, it's better to take a few minutes to verify the status of the promoters.

 

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