A Texas-based fund management firm run by father and son will have its license revoked by the CFTC after a case was made against them against fraudulently soliciting clients for FX and commodity trading. Growth Capital Management LLC which was run by Robert Mihailovich, Sr., and his son were found to have solicited $30 million from customers. The pair have been banned to work as financial professionals.
Robert Mihailovich, Sr., was involved in an earlier case with the regulators, he had served a 27 month sentence and whilst he was on a 3 year supervision the $30 million was engulfed. Mihailovich and his son had collected the $300 million from 93 clients who were offered managed accounts. The case also showed that Growth Capital Management failed to adhere to many regulatory principles and failed to appear at court hearings.
In June, The CFTC had also obtained a consent order against the defendants son Robert Mihailovich, Jr., that imposed a $40,000 civil monetary penalty and banned him from seeking registration with the CFTC for 10 years and from engaging in certain commodity-related activities, including trading, for 5 years. Now, the regulator is seeking to revoke any remaining registrations that may apply to father, son and firm and compel them to pay the $9.3 million from the July ruling.
Forex Magnates team have written a report on the new copy trade phenomenal compared to traditional fund management, available in the Q2 quarterly report 2012.