A federal judge entered a Consent Order ("Order") against Florida-based firm Guardian Asset Group, LLC ("Guardian") and principal Andrew Kurzbard for alleged "illegal, off-exchange transactions in precious metals with retail customers on a leveraged, margined, or financed basis," and for acting as an unregistered futures commission merchant ("FCM"). The Order stemmed from a September 2015 Complaint filed by the CFTC.
The Order specified that Guardian and Mr. Kurzbard solicited retail customers for the purchase of precious metals on a financed basis, and utilized a third party, AmeriFirst, to provide financing for customer loans. The purchased metals were never delivered to the retail customers, nor were the transactions ever traded on a futures exchange, as required by Section 4(a) of the Commodity Exchange Act ("CEA"). Under the CEA, such transactions must be either traded on an exchange or delivered within 28 days (see CEA Sections 4(a) and 2(c)(2)(D)(ii)(III)).
In addition, the judge found that Mr. Kurzbard and Guardian violated CEA Section 4d(a) by accepting orders for retail commodity transactions despite not being registered with the CFTC as an FCM.
The Order requires Guardian and Mr. Kurzbard to pay over $1.7 million in restitution and penalties. It also imposes futures trading and registration restrictions.
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