CFTC opposes attempt by alleged Forex fraudster to stay action against him

Maria Nikolova

The US regulator argues that Brett Hartshorn’s motion to stay the civil proceedings against him is simply a delay tactic.

Brett Hartshorn, whom the Commodity Futures Trading Commission (CFTC) accused of having fraudulently solicited at least $906,000 for purposes of Forex trading, has faced opposition to his attempt to halt the civil proceedings against him.

On April 11, 2019, the CFTC filed a Letter with the New York Southern District Court, arguing that a motion by the defendant for an indefinite stay of the action has to be nixed.

Hartshorn sent the following email on April 2, 2019:

I have received a Grand Jury Target Letter from the middle district of Florida U.S. Attorneys Office.

I respectfully request a “Stay” of civil proceedings and a “Stay” of the requirement to “Respond” in the civil case brought against me, due by 4/15/19.

The reason for my request is that I am considering invoking my fifth amendment right in the civil case, so that I do not prejudice the criminal case.

I respectfully request a “Stay” until the criminal case is resolved. Thank you very much for your time and consideration”.

In response to this request, the CFTC says it opposes any stay in this case, much less the open-ended and indefinite stay requested by Hartshorn. The defendant does not claim that he has been charged criminally; thus, there is presently no “criminal case” against him, the regulator notes. In addition, counsel for the CFTC has been informed that the defendant received the target letter on November 2, 2018. Since receiving the target letter more than five months ago, Hartshorn has participated in the civil case, including by: filing a request that the Court vacate the Clerk’s entry of default on November 19, 2018; attending a phone conference with the Court and Plaintiff’s counsel on January 31, 2019; and filing an Answer on February 27, 2019.

According to the Commission, the defendant has not carried his burden of articulating why any stay is appropriate where there has been no indictment. Moreover, such a stay would be prejudicial to the CFTC and not in the public interest because it would indefinitely delay discovery in this case.

Let’s recall that the CFTC has found that from at least June 18, 2008 to in or around 2014 Hartshorn fraudulently solicited at least 13 individuals including members of his church and individuals he met in his local community, to invest in off-exchange foreign currency on a leveraged, margined, or financed basis and to give Hartshorn discretionary authority to trade forex on their behalf. Hartshorn solicited and/or managed at least $906,000 in client funds.

The defendant had challenged the CFTC action based on statute of limitations, improper venue, and lack of CFTC jurisdiction. In September 2018, Judge Andrew L. Carter denied Brett Hartshorn’s motion to dismiss in its entirety.

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