A Rockwall trader forgot to mention to investors sinking $30 million into his company that his dad was something of a ne’er-do-well, according to the U.S. Commodity Futures Trading Commission.
OK, that isn’t really fair. His dad wasn’t totally idle: he served 27 months for a mail fraud conviction and was ordered to pay $197,000 restitution.
This may come as a suprise, but the feds say the $30 million was solicited fraudulently.
Robert Mihailovich, Jr. was accused of failing to disclose in registration filings that his father, Robert Mihailovich, Sr, who was a controlling principal of his company, Growth Capital Management, is a fraudster.
The CFTC announced that Junior has been banned from trading commodities for five years. Mihailovich, Jr. will also pay a $40,000 fine and is banned from registering with the CFTC for 10 years.
Mihailovich Jr. his father and their company solicited investors in connection with commodities trading and foreign currency transactions, the agency said.
The CFTC’s complaint says Mihailovich, Sr. made false representations claiming to be a successful commodity futures trader and touting his company as having a profitable trading record. Mihailovich, Sr. is accused of saying he never experienced a losing trade. Actual trading accounts managed and controlled by Mihailovich, Sr. realized net losses, the CFTC said.
In the continuing suit, the CFTC is seeking sanctions against GCM and Mihailovich, Sr. in connection with default judgments entered against the defendants in March 2011 and November 2011.
All this should make for a special Father’s Day.