Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

U.S. Commodity Futures Trading Commission v. United Business Servicing LLC

United States District Court, C.D. California, Western Division

July 24, 2017

U.S. COMMODITY FUTURES TRADING COMMISSION Plaintiff,
v.
UNITED BUSINESS SERVICING LLC, d/b/a SCHOOLOFTRADE.COM, UNITED BUSINESS SERVICING, INC., d/b/a SCHOOLOFTRADE.COM, JOSEPH DUFRESNE, a/k/a JOSEPH JAMES, and MEGAN RENKOW, a/k/a MEGAN JAMES, Defendants.

         CONSENT ORDER FOR PERMANENT INJUNCTION, RESTITUTION, CIVIL MONETARY PENALTY, AND OTHER EQUITABLE RELIEF AGAINST DEFENDANTS UNITED BUSINESS SERVICING, LLC D/B/A SCHOOLOFTRADE.COM, UNITED BUSINESS SERVICING, INC. D/B/A SCHOOLOFTRADE.COM, JOSEPH DUFRESNE A/K/A JOSEPH JAMES, AND MEGAN RENKOW A/K/A MEGAN JAMES

          JOHN A. KRONSTADT U.S. DISTRICT JUDGE

         I. INTRODUCTION

         On September 30, 2016, Plaintiff Commodity Futures Trading Commission (“Commission” or “CFTC”) filed a Complaint against Defendants United Business Servicing, LLC (“UBS LLC”), doing business as Schoolof Trade.com (“SoT”), United Business Servicing, Inc. (“UBS Inc.”), doing business as SoT, Joseph Dufresne (“Dufresne”), also known as Joseph James, and Megan Renkow (“Renkow”), also known as Megan James (collectively, “Defendants”) seeking injunctive and other equitable relief, as well as the imposition of civil penalties, for violations of the Commodity Exchange Act (“Act”), 7 U.S.C. §§ 1 et seq. (2012), and the Commission's Regulations (“Regulations”) promulgated thereunder, 17 C.F.R. §§ 1.1 et seq.

         II. CONSENTS AND AGREEMENTS

         To effect settlement of all charges alleged in the Complaint against them, Defendants, without a trial on the merits or any further judicial proceedings:

         1. Consent to the entry of this Consent Order for Permanent Injunction, Civil Monetary Penalty, and Other Equitable Relief Against Defendants United Business Servicing, LLC, d/b/a Schoolof Trade.com, United Business Servicing, Inc., d/b/a Schoolof Trade.com, Joseph Dufresne, a/k/a Joseph James, and Megan Renkow, a/k/a Megan James (“Consent Order”); 2. Affirm that they have read and agreed to this Consent Order voluntarily, and that no promise, other than as specifically contained herein, or threat, has been made by the Commission or any member, officer, agent or representative thereof, or by any other person, to induce consent to this Consent Order; 3. Acknowledge service of the summons and Complaint; 4. Admit the jurisdiction of this Court over them and the subject matter of this action pursuant to 7 U.S.C. § 13a-1 (2012); 5. Admit the jurisdiction of the Commission over the conduct and transactions at issue in this action pursuant to the Act, 7 U.S.C. §§ 1 et seq.; 6. Admit that venue properly lies with this Court pursuant to 7 U.S.C. § 13a-1(e) (2012); 7. Waive:

(a) Any and all claims that they may possess under the Equal Access to Justice Act, 5 U.S.C. § 504 (2012) and 28 U.S.C. § 2412 (2012), and/or the rules promulgated by the Commission in conformity therewith, 17 C.F.R. §§ 148.1 et seq. (2016), relating to, or arising from, this action;
(b) Any and all claims that they may possess under the Small Business Regulatory Enforcement Fairness Act of 1996, Pub. L. No. 104-121, §§ 201-253, 110 Stat. 847, 857-868 (1996), as amended by Pub. L. No. 110-28, § 8302, 121 Stat. 112, 204-205 (2007), relating to, or arising from, this action;
(c) Any claim of Double Jeopardy based upon the institution of this action or the entry in this action of any order imposing a civil monetary penalty or any other relief, including this Consent Order; and
(d) Any and all rights of appeal from this action;

         8. Consent to the continued jurisdiction of this Court over them for the purpose of implementing and enforcing the terms and conditions of this Consent Order and for any other purpose relevant to this action, even if Defendants now or in the future reside outside the jurisdiction of this Court;

         9. Agree that they will not oppose enforcement of this Consent Order on the ground, if any exists, that it fails to comply with Rule 65(d) of the Federal Rules of Civil Procedure and hereby waive any objection based thereon;

         10. Agree that neither they nor any of their agents or employees under their authority or control shall take any action or make any public statement denying, directly or indirectly, any allegation in the Complaint or the Findings of Fact or Conclusions of Law in this Consent Order, or creating or tending to create the impression that the Complaint and/or this Consent Order is without a factual basis; provided, however, that nothing in this provision shall affect their: (a) testimonial obligations, or (b) right to take legal positions in other proceedings to which the Commission is not a party. Defendants shall undertake all steps necessary to ensure that all of their agents and/or employees under their authority or control understand and comply with this agreement;

         11. By consenting to the entry of this Consent Order, Defendants neither admit nor deny the allegations of the Complaint or the Findings of Fact and Conclusions of Law in this Consent Order, except as to jurisdiction and venue, which they admit. Defendants agree and intend that the allegations contained in the Complaint and all of the Findings of Fact and Conclusions of Law contained in this Consent Order shall be taken as true and correct and be given preclusive effect, without further proof, in the course of: (a) any current or subsequent bankruptcy proceeding filed by, on behalf of, or against Defendants; and/or (b) any proceeding pursuant to 7 U.S.C. §12(a) (2012) and/or 17 C.F.R. §§3.1-3.75 (2016); and/or (c) any proceeding to enforce the terms of this Consent Order. Defendants do not consent to the use of this Consent Order, or the Findings of Fact and Conclusions of Law in this Consent Order, as the sole basis for any other proceeding brought by the Commission;

         12. Agree to provide immediate notice to this Court and the Commission by certified mail, in the manner required by paragraph 82 of Part VI of this Consent Order, of any bankruptcy proceeding filed by, on behalf of, or against them, whether inside or outside the United States; and 13. Agree that no provision of this Consent Order shall in any way limit or impair the ability of any other person or entity to seek any legal or equitable remedy against Defendants in any other proceeding.

         III. FINDINGS AND CONCLUSIONS

         The Court, being fully advised in the premises, finds that there is good cause for the entry of this Consent Order and that there is no just reason for delay. The Court therefore directs the entry of the following Findings of Fact, Conclusions of Law, permanent injunction, restitution, civil monetary penalty, and equitable relief pursuant to 7 U.S.C. § 13a-1 (2012), as set forth herein.

         THE COURT HEREBY FINDS:

         A. Findings of Fact The Parties to This Consent Order 14. Plaintiff U.S. Commodity Futures Trading Commission is an independent federal regulatory agency charged by Congress with the responsibility for administering and enforcing the provisions of the Act and the Regulations promulgated thereunder.

         15. Defendant United Business Servicing LLC, d/b/a Schoolof Trade.com, was a Delaware entity formed in February 2008. At various times, UBS LLC listed its address as Los Angeles, California and San Pedro, California. From in or about late 2008 until in or about early 2012, UBS LLC described itself on the SoT website as the parent company of SoT. UBS LLC filed a Certification of Cancellation with Delaware in October 2012. UBS LLC has never been registered with the CFTC in any capacity.

         16. Defendant United Business Servicing Inc., d/b/a Schoolof Trade.com, is a Delaware corporation, incorporated in July 2011. In November 2011, UBS Inc. registered as a foreign corporation in California. UBS Inc.'s California incorporation record lists its address as Redondo Beach, California. UBS Inc. is the successor in interest to UBS LLC. Since in or about early 2012, UBS Inc. has described itself on the SoT website as the parent company of SoT. UBS Inc. has never been registered with the CFTC in any capacity.

         17. Defendant Joseph Dufresne, who uses the name Joseph James in connection with his activities related to SoT, currently resides in Palos Verdes Estates, California. Dufresne is the husband of Defendant Renkow. At various times during the Relevant Period, Dufresne has held himself out as the Owner, Founder, CEO, and Head Trader of SoT. Dufresne has never been registered with the CFTC in any capacity.

         18. Defendant Megan Renkow, who uses the name Megan James in connection with her activities related to SoT, resides in Palos Verdes Estates, California. Renkow is the wife of Defendant Dufresne. Renkow has never been registered with the CFTC in any capacity.

         Defendants Made Fraudulent Solicitations

         19. Renkow formed UBS LLC in Delaware in February 2008. She is listed as the sole Member on UBS LLC's formation papers, although in a document executed in September 2008, and again in a similar document in June 2009, Renkow confirmed that Dufresne was an officer of the company and had full access to company accounts and full authority over the operations of the company.

         20. The SoT website (www.schooloftrade.com) first appeared in or about late 2008. The website at that time listed UBS LLC as the parent company of SoT.

         21. UBS Inc. was incorporated in Delaware in July 2011. In November 2011, Renkow registered UBS Inc. as a foreign corporation in California. According to UBS Inc.'s California corporation records, Renkow is the President, Chief Executive Officer, Secretary, and Chief Financial Officer of UBS Inc. In a document dated January 2012, Renkow stated that she is the “sole 100% owner of all shares and interest in United Business Servicing Inc.” 22. As late as January 2012, UBS LLC continued to be listed as the parent company on the SoT website; however, sometime between January 2012 and March 2012, the SoT website was changed to reflect UBS Inc. as the parent company of SoT. In or about September 2012, Renkow filed a Certificate of Cancellation for UBS LLC with the state of Delaware. The cancellation was granted in or about October 2012.

         23. Since at least October 2011, and continuing through at least September 30, 2016 (the “Relevant Period”), Defendants have operated the SoT website through which they have solicited members of the public to purchase memberships in SoT that allow them varying degrees of access to trading strategies and systems to be used for trading commodity futures contracts. Defendants demonstrate how to use these trading strategies and systems through seminars, training videos, one-on-one training sessions, and access to a “Live Trading Room.” 24. SoT offers three levels of membership: a) a Beginner Membership for the price of $249.99 per month; b) an Intermediate Membership for a one-time price of $2, 499.00 plus $99 per month after six months; and c) a lifetime Advanced Membership for a one-time price of $4, 999.00. The Intermediate and Advanced levels of membership offer clients access to an increasing number of trading strategies beyond the Beginner level.

         25. Purchasers of the Beginner Membership have access to SoT's trading newsletter (available through a link on the SoT website), as well as a limited number of tutorials and strategies focused on the basics of trading.

         26. Purchasers of the Intermediate Membership have all of the benefits of the Beginner Membership, as well as access to a broader array of tutorials and strategies.

         27. Purchasers of both the Intermediate and Advanced memberships have access to a customizable automated trading system. According to its website, SoT offers “3 different fully-automated and semi-automated trading systems for our clients to make money on any market, any time of the day” that “[use] cutting-edge algorithmic trading technology […] that will allow our computer to do the trading for us [sic].” At various times during the Relevant Period, both Intermediate and Advanced memberships also included a Professional Trading Plan, which, according to the “Frequently Asked Questions” section of the SoT website, is a “personalized trade plan focusing on the best trading opportunities according to your trading times.” 28. Purchasers of the Advanced Membership also have access to what SoT describes as “Concierge Services.” These services include, among other things, one-on-one training sessions and technical support, for which a client pays an hourly fee.

         29. The most highly touted benefit of Advanced Membership is access to SoT's “Live Trade Room.” According to the SoT website, this is “the most important part of the Advanced Membership.” The “Live Trade Room” is a video feed that Advanced Members can access through their computers or other streaming devices. The SoT website describes the “Live Trade Room” as a place where clients can follow Dufresne as he engages in “‘live trades' called with exact entry and exit information using [SoT's] proprietary indicators, templates, and strategies.” 30. During the Relevant Period, SoT sold approximately 877 memberships and took in at least $2, 776, 994. From January through April 2016, SoT averaged nineteen (19) new clients per month and approximately $60, 000 per month in revenue from sales of memberships.

         31. During the Relevant Period, Defendants marketed SoT's products and services through, among other methods, the SoT website, seminars open to the public, marketing emails, and various social media sites such as Twitter, Facebook, and YouTube. These products and services were marketed to clients as tools that would enable them to make money trading commodity futures contracts and Defendants touted the likelihood of profits that could be gained by using them. For example, among the statements Defendants made on the SoT website, in emails to clients, and in social media are the following:

a. In a May 9, 2012 posting to the webpage www.schooloftrade-review-diet.com, Dufresne states, “There is NOTHING more powerful than learning by DOING with me every day, and you will make an average of 30 ticks per day in the first 10 days of my ‘plan' so you will make money while you learn the ropes” (emphasis added)
b. In a February 2014 email response to a potential client who inquired about his ability to make back the cost of his SoT membership through trading with Dufresne, Renkow states, “If you trade with JJ 16 trading days per month it will take you a little over one month to recoup your total investment” (emphasis added)

         32. One of the major selling points employed by Defendants in marketing SoT is the purported experience and success of Dufresne as a trader. A webpage on SoT's website titled “Meet the Team” listed Dufresne at the top and referred to him as a “Professional Trader… [who] specializes in intra-day trading of crude oil, Euro, Gold and E-Mini Russell Futures Markets along with the Major Forex Pairs.” The SoT Blog (which is accessed from a link on the main webpage of the SoT website) provided a link to Dufresne's page on the LinkedIn.com website. As late as August 2015, that page, which purported to provide a resume of Dufresne's professional background, stated, among other things that:

a. Dufresne “has been trading Futures and FOREX since the year 2000”
b. “After 3 years of very successful trading, [Dufresne] opened his first Hedge Fund in 2003”
c. Dufresne has been a “Professional Day Trader” at Vantage Capital Advisers LLC in Los Angeles since 2000
d. Dufresne received an award as “Trader of the Year” in 2001
e. Dufresne was named to the “Top 30 under 30” by Professional Trader Monthly in 2006

         33. Defendants also touted Dufresne's experience in solicitation emails to prospective clients, including the following:

a. In an October 20, 2014 solicitation email, Dufresne states, “What if you had a 14-year, professional trader helping you every step of the way?” (emphasis added)
b. In an October 24, 2014 solicitation email, Dufresne states, “Trend-Following has been our ‘bread-and-butter' for over 10 years” (emphasis added); and

         34. All of these statements regarding Dufresne's background and experience as a trader are false and misleading. Dufresne has not been a professional trader since 2000, nor has he been recognized for his trading acumen as described above. In fact, prior to 2007, not only was Dufresne not a professional trader, he had no trading experience whatsoever. In September 2007, Dufresne opened two trading accounts - one specifically for futures trading and one specifically for foreign exchange trading - in his own name with a registered Futures Commission Merchant (“FCM”). In the account application documents for each account, Dufresne was required to list his trading experience. Each application asked for the number of years' experience he had trading stocks, options, futures, and forex. Dufresne responded “none” for each category on each application. The applications also asked for the number of trades executed in each of these categories in an average month. Again, Dufresne responded “none” for each category on each application.

         35. In October 2008, Dufresne submitted an application to the National Futures Association (“NFA”), the futures industry's self-regulatory organization, for registration as a Principal of an entity called Vantage Capital Management LLC (“Vantage”). At the time, Vantage had a pending application with the NFA to be registered as a Commodity Trading Advisor (“CTA”). In his application - which Dufresne was required to verify as “true, complete, and accurate and… not misleading in any material respect….” - Dufresne was required to list his employment history. For the period June 1999 to November 2007, Dufresne listed his employment as including jobs as a maintenance worker at a country club, a front desk operator at a fitness center, a student worker at Arizona State University, and a loan officer, sales manager, or owner at various mortgage companies. Dufresne's application also stated that for the period November 2007 to October 2008, he was unemployed. Nowhere in his application did Dufresne state that he had been a professional day trader at Vantage Capital Advisers LLC since 2000, or that he had been in charge of a hedge fund since 2003. In February 2009, both Dufresne and Vantage withdrew their applications with the NFA.

         36. Dufresne's claims to have been a professional trader and hedge fund operator are also belied by the fact that he was incarcerated for six months in ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.