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by Mike Caswell

Jonathan Cartu, an Ontario man charged by the U.S. Commodity Trading Futures Commission for a $165-million options scheme, has lost an effort to have the charges thrown out. (All figures are in U.S. dollars.) The CFTC claims that Mr. Cartu and others defrauded investors through an offshore options scheme that promised returns as high as 85 per cent. Unbeknownst to investors, the trades were rigged against them, the CFTC says.

Mr. Cartu had been seeking to have the case dismissed on jurisdictional grounds, complaining that the CFTC had failed to show that he defrauded U.S. investors. The operation was run from Israel and the CFTC did not present any evidence that he personally contacted U.S. investors, he contended. Without any U.S. connections, the U.S. courts were not the appropriate venue for the case, he said.

Unfortunately for Mr. Cartu, the judge has ruled against him, finding that the U.S. courts do have jurisdiction. In a ruling handed down on Tuesday, Aug. 15, the judge has found that the CFTC set out many U.S. connections. In particular, the CFTC accused Mr. Cartu of sending an e-mail to employees telling them to "PICK UP THE PHONE AND CALL" a list of high-priority U.S. and Canadian customers. He also offered a discounted rate to new U.S. customers.

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