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The U.S. Commodity Futures Trading Commission (CFTC) today announced that it obtained a preliminary injunction against defendants Matthew B. Pizzolato, formerly of Tickfaw, La., William C. Guidry of Plano, Texas, and Capital Funding Consultants, L.L.C. (Capital Funding) of Covington, La. The CFTC charged the defendants in November, 2009, with fraud in connection with the operation of a commodity pool (see CFTC Press Release 5755-09, November 24, 2009, and CFTC v. Capital Funding Consultants, L.L.C., et al., No. 2:09-cv-7409 (E.D. La. 2009)).
Order continues the court’s asset freeze against the defendants
The preliminary injunction order, entered on December 10, 2009, by U.S. District Court Judge Mary Ann Vial Lemmon, continues the asset freeze Judge Lemmon entered against the defendants on November 20, 2009, and prohibits the defendants from further violations of federal commodity law. The order finds that there is a reasonable likelihood that the CFTC would prevail on the merits of its case and that a preliminary injunction is necessary to protect the public from further loss and damage and to enable the CFTC to fulfill its statutory duties.
Specifically, the order finds that Pizzolato, as part of a broader scheme in which he solicited $19.5 million, obtained more than $3.1 million from 24 mostly elderly investors, which he gave to Guidry to invest. Despite representing to these elderly investors that their funds would be invested in safe, secure investments with guaranteed rates of return, Pizzolato gave the funds to Guidry to trade high risk commodity futures, among other things. The order also finds that Guidry and Capital Funding misappropriated more than $221,815.53 of investor funds for personal purposes, and used some of those misappropriated funds to trade commodity futures in accounts owned by Capital Funding. The investors were not told about Guidry’s commodity futures trading losses. The order further finds that Guidry and Capital Funding commingled commodity pool participants’ funds with the funds of other persons.
Pizzolato’s criminal case is pending before Judge Lance M. Africk
On the same day that the CFTC filed its civil complaint, November 20, 2009, Pizzolato was arrested, charged with felony offenses and indicted by a federal grand jury for operating a $19.5 million Ponzi scheme. The criminal case is pending before Judge Lance M. Africk (U.S.A. v. Pizzolato, No. 2:09-cr-00378 (E.D. La. 2009)). Pizzolato has been detained and remains in custody in connection with the criminal charges.
In the continuing litigation, the CFTC is seeking permanent injunctive relief, repayment of ill-gotten gains to defrauded investors, civil penalties and other equitable relief.
The following CFTC Division of Enforcement staff members are responsible for this case: Susan B. Padove, Elizabeth M. Streit, Mary Elizabeth Spear, Scott R. Williamson, Rosemary Hollinger and Richard B. Wagner.
