Commodity Futures Trading Commission v. Mikkelsen
- John Cronan
- 1:20-cv-03833
- U.S. District Court · Southern District of New York
- 5
In Commodity Futures Trading Commission v. Mikkelsen, Judge Cronan approved default relief after Mikkelsen failed to respond, including an injunction, restitution, and a $3,573,860.61 civil penalty.
The ruling affects Mikkelsen, who was found liable based on his default and is subject to a permanent injunction, restitution of $1,191,286.87, and a $3,573,860.61 civil monetary penalty; it also concerns the investors identified as victims in the Commission’s allegations.
What happened
In Commodity Futures Trading Commission v. Mikkelsen, the Commission alleged that Mikkelsen fraudulently solicited at least $1.5 million from more than 100 investors for foreign-currency trading, then misused the money. Mikkelsen did not respond to the lawsuit or appear in court after being properly served.
The court accepted the lawsuit’s well-supported allegations as true because Mikkelsen defaulted. It found that he committed fraud involving off-exchange foreign-currency contracts, failed to register as a commodity trading advisor, and committed fraud while acting as one.
Judge John P. Cronan stated that the court would enter judgment by separate order, including a permanent injunction, $1,191,286.87 in restitution, and a $3,573,860.61 civil monetary penalty. The court directed the Clerk to close the case.
The detailed version
- Commodity Futures Trading Commission v. Mikkelsen · No. 1:20-cv-03833
- John Cronan
- Feb. 22, 2022
Background
The Commodity Futures Trading Commission sued Casper Mikkelsen under the Commodity Exchange Act and related Commission regulations. The Commission alleged that Mikkelsen operated a fraudulent scheme involving retail leveraged or margined off-exchange foreign-currency contracts. According to the complaint, more than 100 individuals and entities invested at least $1.5 million, but Mikkelsen misappropriated the funds for personal use and used some client deposits to make payments to other clients.
The Commission also alleged that Mikkelsen created a website containing false information about his business and performance history and acted as an unregistered commodity trading advisor. The Commission later stated that he stole more than $1.1 million from 106 victims.
Service and Default
After earlier service concerns, the Commission served Mikkelsen on October 19, 2021, in a manner the court found complied with the Federal Rules of Civil Procedure, the Hague Convention provision cited by the court, and Danish law identified in the opinion. Mikkelsen did not answer, file another response, or appear in the case. He also did not oppose the Commission’s motion for default judgment or attend the January 24, 2022 hearing.
A default judgment is a judgment entered when a defendant fails to respond or defend. At the hearing, the court found that Mikkelsen had notice of the lawsuit and hearing and accepted the complaint’s well-pleaded allegations as true.
Court’s Findings and Relief
The court concluded that the allegations established that Mikkelsen committed fraud in connection with off-exchange foreign-currency contract transactions, failed to register as a commodity trading advisor, and committed fraud as a commodity trading advisor. The court stated that it would enter judgment on liability and impose a permanent injunction and restitution in the amount requested by the Commission.
The Commission requested $1,191,286.87 in restitution, plus any post-judgment interest, and a civil monetary penalty of $3,573,860.61, representing triple the alleged monetary gain. The court explained that civil penalties under the Commodity Exchange Act are intended to advance the statute’s remedial purposes and deter similar violations. It found the maximum requested penalty appropriate because of the duration and seriousness of the fraud, the harm to victims, the false website and account statements, Mikkelsen’s failure to show remorse or return the funds, and his failure to appear or present evidence of an inability to pay.
The court stated that it would enter the judgment by separate order and directed the Clerk of Court to close the case.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.