Monday, March 2, 2009

Illinois Charges

An Illinois attorney has been charged with ethics violations in connection with his conduct as managing member of Tsunami Capital LLC. the entity was registered with the Commodity Futures Trading commission as a commodity pool operator and trading advisor.

The attorney is alleged to have solicted investors by making false representations about the financial stability of Tsunami and presented potential investors with false financial information. The Adminstrator alleges misconduct involving three investors. One allegation states:

In late 2005, Respondent made oral representations to potential investor Peter Tamuzian ("Tamuzian") that Tsunami Lakeshore had been profitable. In or about February 2006, as a result of Respondent’s representations, Tamuzian invested $60,000 from his employee retirement savings account. Respondent knew that his representations to Tamuzian were false since the Tsunami Lakeshore account had been closed since January 2005.

Sometime after February 2006, Respondent created, or caused to be created, account statements for Tsunami Lakeshore which purported to show that Tamuzian’s investment had earned 7.83% for March 2006. Respondent knew or should have known that the account statements he provided to Tamuzian was false since the Tsunami Lakeshore account had been closed since January 2

In May 2006, based on the false statements provided to him by Respondent, Tamuzian invested an additional $40,000 to Respondent to invest in the Tsunami Lakeshore account.

From at least April 2002 to at least April 2007, by making false oral representations about the profitability of Tsunami Lakeshore and by creating false account statements that reflected profitable track records, Respondent solicited and accepted $16,312,100 from 108 individuals for the purpose of trading financial futures, and used those funds for his own personal purposes.

The CFTC had filed a civil complaint concerning the same allegations and the attorney reportedly has just been indicted on federal criminal charges. The linked Chicago Tribune article describes him as a "big time investor and former owner of two of the hottest high-end nightclubs in Chicago." (Mike Frisch)

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