Beware of CFTC – Review Part 2

Alan Friedland’s case has been rejected for summary judgment by the CFTC (right).

A trial in the Compcoin fraud case is now scheduled for January 31st, 2022.

In July, the CFTC filed a motion for summary judgment against Friedland.

The CFTC said there was “no real question of these significant facts” in the case in its brief.

The court disagreed in a fourteen-page ruling addressing the seven charges of fraud asserted against Friedman.

Fraud is the subject of counts 1 and 4. The court determined that the CFTC’s supplied evidence had not unambiguously established that Friedland acted with malice.

The implication is that Friedland purposefully “defrauded, manipulated, or deceived” Compcoin victims.

Concerning “fraud by a CTA,” counts 2 and 5 exist (Commodity Trading Advisor).

The court determined that CompCoin was undeniably not a CTA in and of itself.

Furthermore, the CFTC has not provided this Court with any references supporting the idea that Friedland may be held accountable for claims made on behalf of a non-CTA just because he is a principal or affiliated person of another CTA.

Furthermore, the CFTC has not provided enough evidence to provide any other legal justification for attributing Compcoin LLC’s assertions to Fintech or Friedland.

Counts 3 and 7 deal with encouraging and helping.

The claims made by the CFTC in these cases were based on justifications already found wanting in other matters.

The CFTC has failed to demonstrate that a violation has a place, and as a result, it has also failed to demonstrate that its allegations of aiding and abetting are entitled to summary judgment.

“Failure to include an appropriate disclaimer” is the subject of count six.

The court determined that CompCoin’s website was the relevant subject.

There is no proof in the record that Friedland, in his capacity as a principal of Fintech, made any further statements or added the Compcoin LLC white paper or the historical rates of return for ART to Fintech’s website.

Insofar as the CFTC may pursue count 6 allegations against CompCoin, the court’s determination of whether the pertinent part of the Code of Federal Regulation would apply was “far from clear.”

The CFTC has failed to provide any legal support for applying the law to Compcoin LLC’s acts, and it is unclear whether it does.

As a reminder, the CFTC was unable to overcome the hurdle of summary judgment as a result of this decision. These arguments and presentations will still be made in the trial.

On December 14th, the CFTC requested summary judgment, but it was denied. On the same day, a scheduling order for the trial was issued.

Friedland’s December 13th appeal might stall the process.

The appeal filed by Friedland relates to a June 30th filing in which Friedland requested authorization to submit revised replies and defenses to the CFTC’s complaint.

The Court rejected the motion to amend because the defendants did not provide sufficient justification for their delay and did not provide information on when they learned of the reasons for the proposed revisions or how diligently they sought permission to modify.

On December 13, Friedland’s request for reconsideration was rejected.

Later that day, a notice of appeal was filed in response.

Previously, Friedland had hoped to delay the January trial by 90 days.

so that enough time may be given for preparation so that changes can be made based on pending motions, and so that the prompt and effective adjudication of this case can be carried out.

On December 14, that motion—filed on December 6—was rejected.

The other significant development is an order setting a settlement meeting, pending trial and the outcome of Friedland’s appeal.

The parties were instructed to attend a future settlement meeting by an order issued on December 15th.

25th December 2021 update On January 10, 2022, the settlement conference is planned to take place.

Updated on February 6th, 2022 On February 1st, Alan Friedland’s appeal was turned down and no settlement was reached.

On January 31st, the jury trial began. On Thursday, February 3, the trial’s fourth day was held.

Day four of Friedland’s trial saw a settlement with the CFTC.

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