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Case Status Report: One World Capital Group
U.S. Commodity Futures Trading Commission v. One World Capital Group, et al., Case Number 07-CV-7002; Filed in the Northern District of Illinois before Judge Lefkow
Any important case developments or instructions to the customers will be posted to this website.
June, 2008: On June 12, 2008, a status hearing was held before Judge Lefkow: The Defendants continue to work to complete an accounting. The next status date is set for August 28, 2008.
April, 2008: On April 3, 2008, a status hearing was held before Judge Lefkow: At which time the court required Defendants to complete an accounting by May 19, 2008. The next status date is set for June 12, 2008.
During the status the following information was provided to the court:
On December 13, 2007, the CFTC filed an emergency action against One World and its President Walsh because One World, a registered FCM, could not demonstrate compliance with net capital requirements. The Court granted our motion for a statutory restraining order (SRO) and asset freeze and the parties entered into a Consent Preliminary Injunction on February 8, 2008. Since the case was filed, the parties have been conducting expedited discovery. The CFTC has issued subpoenas for business records, including bank and trading records, and has been reviewing them. Pursuant to the SRO, the CFTC was able to freeze $639,815 in assets of One World. The CFTC has learned through customer interviews and a review of the records that there are customer claims of liabilities of between $12 and $14 million.
Additionally, One World and it President have represented that it will not be issuing any 1099s to its customers. As a result, the parties have agreed to provide customers with the Tax ID number of the company:
One World Capital Group, LLC
Tax ID No. 20-3419350
March 2008: The Court reset the status hearing to April 3, 2008.
February, 2008: The Court entered a Consent Preliminary Injunction against Defendants One World Capital Group and John E. Walsh on February 6, 2008. The Consent, among other things, continues the asset freeze and preservation of books and records.
A number of customers have made inquiries requesting the return of funds from their account. Please be advised that the parties cannot comply with any requests for disbursements of customer funds until the Court has entered an order that authorizes and directs the disbursement of funds. It is not anticipated that this can occur until the complete extent of One World’s assets and liabilities has been established, and the Court can rule on the allegations in the CFTC’s complaint. Unfortunately, at this time we cannot provide a timetable when this might occur. Lastly, we ask for your patience and hope that you understand this may take some time to sort out.
January, 2008: The Division of Enforcement (Division) is currently conducting discovery which includes issuing subpoenas, gathering documents and taking deposition testimony in order to assess the facts and circumstances surrounding this situation.
The National Futures Association (NFA) is the industrywide, self-regulatory organization for the U.S. futures industry. The NFA has been assisting the Division in collecting customer information. The Division asks all One World Capital Group (One World) customers to contact the Information Center at the National Futures Association at 312-781-1300 and provide them with your general One World account information. We also request that all customers or persons and entities otherwise associated with One World maintain copies of any documents including emails, statements, correspondence, applications, etc. pertaining to your dealings with One World and its employees and agents.
Pursuant to the asset freeze obtained on December 13, 2007, all One World business must cease, and the status quo must be maintained. Therefore, no further trading on MetaTrader should occur, trades occurring after December 13, 2007 may not be honored, and funds and trading accounts cannot be transferred to different futures commission merchants (FCMs).
December, 2007: The U.S. Commodity Futures Trading Commission (CFTC) announced that on December 13, 2007 it sued One World Capital Group, LLC (One World) of Winnetka, Illinois, a registered FCM, and its President, John Edward Walsh of Lake Forest, Illinois, charging them with inability to demonstrate compliance with capitalization requirements and with failure to maintain required books and records.
On the same day the case was filed, the CFTC won an asset freeze and other emergency relief that will enable the Commission to freeze the assets of One World and safeguard the interests of its customers.
The complaint alleges that One World has been unable to demonstrate that it has maintained at least $1 million in adjusted net capital, the minimum requirement needed for FCMs that are Foreign Currency Dealer members of the NFA.
According to the CFTC complaint, since at least November 28, 2007, One World and Walsh failed to demonstrate compliance with the net capital amount as required by the Commodity Exchange Act and CFTC regulations. As of December 10, 2007, the complaint charges, One World failed to demonstrate that it had any net assets. While One World appeared to possess $554,000 of funds held in customer accounts, since at least November 2, 2007, the NFA has been receiving complaints from customers alleging that they are unable to get their funds back from One World. The complaint alleges that the amount claimed outstanding by customers exceeds $4 million. The complaint also alleges that Walsh conceded an inability to identify all of One World’s customer liabilities. Furthermore, the complaint charges One World and Walsh with failing to maintain books and records as required by a CFTC regulation.
Related Documents:
- Answers and Affirmative Defenses, February 16, 2008
- Consent Order for Preliminary Injunction and Other Ancillary Relief, February 8, 2008
- CFTC Press Release 5424-07
- Complaint, December 13, 2007
- Statutory Restraining Order, December 13, 2007
Staff Contacts:
Joy McCormack
Investigator
CFTC Division of Enforcement
525 West Monroe Street
Suite 1100
Chicago, IL 60661
jmccormack@cftc.gov
Jennifer Diamond
Attorney
CFTC Division of Enforcement
525 West Monroe Street
Suite 1100
Chicago, IL 60661
jdiamond@cftc.gov