CFTC and SEC Announce $50 Million Distribution to Former Customers of Princeton Economics International, Ltd., and Princeton Global Management, Ltd.
FOR IMMEDIATE RELEASE
Washington, D.C., March 14, 2005 The United States Commodity Futures Trading Commission and United States Securities and Exchange Commission announced today that a court-appointed receiver (Receiver) is in the process of distributing over $50 million as part of an interim distribution to former customers of Princeton Economics International, Ltd. and Princeton Global Management, Ltd. (the Princeton Companies).
The Princeton Companies and Martin Armstrong are defendants in continuing litigation brought by the CFTC and SEC involving allegations of fraud (see CFTC News Release 4312-99, Sept. 14, 1999). The interim distribution of funds follows a 2004 District Court order authorizing the Receiver to proceed with the distribution only after any appeals of that order and certain specified claims detailed in the order had been resolved.
Specifically, the distribution stems from actions filed by the CFTC and SEC alleging that Armstrong and his companies violated the Commodity Exchange Act and federal securities laws, respectively, by engaging in unauthorized commodity futures and options trading and then hiding their trading losses of several hundred million dollars by, among other things, the issuance of false net asset value letters. Mr. Armstrong has been held in civil contempt of a District Court order for failing to produce more than $14 million in assets that the CFTC and SEC contend were proceeds of the fraud.
In earlier related actions filed by the United States Attorney for the Southern District of New York, the customers previously obtained more than $600 million from the Republic New York Securities Corporation (Republic), a futures commission merchant through which the trading was conducted (see CFTC News Release 4590-01, December 17, 2001). The CFTC has also separately entered into settlements with Republic and other individuals associated with the Princeton scheme that imposed, among other things, civil monetary penalties and restitution totaling approximately $20 million. The SEC issued an order revoking Republic's registration and an order barring William H. Rogers, a former Republic employee, from associating with any broker or dealer (see CFTC News Release 4952-04).
Contact: Helene T. Glotzer
SEC Northeast Regional Office