United States District Court, D. Nevada
ORDER GRANTING THE COMMISSION'S MOTION FOR A
PRELIMINARY INJUNCTION AND OTHER EQUITABLE RELIEF [ECF NO.
JENNIFER A. DORSEY JUDGE
Commodity Futures Trading Commission
(“Commission” or “CFTC”) filed a
Complaint for Injunctive Relief, Restitution, Disgorgement,
and Civil Monetary Penalties against David Gilbert Saffron
a/k/a David Gilbert (“Saffron”) and his business
entity, Circle Society, Corp. (“Circle Society”)
for violations of the Commodity Exchange Act, 7 U.S.C.
§§ 1-2f (2012), and Commission Regulations
(“Regulations”) promulgated thereunder, 17 C.F.R.
pts. 1- 190 (2019).
Commission has moved under Section 6(c) of the Act, 7 U.S.C.
§ 13a-1 (2012), for injunctive and other equitable
relief against Saffron and Circle Society. After a hearing on
the merits and having considered the pleadings, declarations,
exhibits, and memoranda filed by the parties, I find that:
1. The court has jurisdiction over the parties and over the
subject-matter of this action under Section 6c of the Act, 7
U.S.C. § 13a-1 (2012).
2. Venue properly lies in this District under Section 6c(e)
of the Act, 27 7 U.S.C. § 13a-l(e) (2012).
3. Saffron and Circle Society have been served with
summonses, the Complaint, and all related filings, including
the Commission's Emergency Ex Parte Motion for a
Statutory Restraining Order and Memorandum in Support, and
the Commission's Motion for a Preliminary Injunction and
Memorandum in Support. No. defendant has opposed any motion.
4. There is good cause to believe that Saffron and Circle
Society have engaged in, are engaging in, or are about to
engage in violations of 7 U.S.C. §§ 6c(b), 6k(2),
6m(1), 6o(1)(A), (B) (2012), and 17 C.F.R. §§
4.20(a)(1), (b), (c) and 32.4 (2019).
5. The Commission has presented evidence showing that, from
at least December 2017 through the present (the
“Relevant Period”), Saffron has fraudulently
solicited and accepted at least $11 million worth of Bitcoin
(“BTC”) and United States Dollars
(“USD”) (BTC, together with USD,
“funds”) from no fewer than 14 members of the
public for the purported purpose of trading off-exchange
binary option contracts on foreign currency
(“forex”) and cryptocurrency pairs, among other
things, on behalf of a commodity pool (“Pool”).
The Commission has presented evidence showing that, from
September 6, 2018, Saffron, individually and as principal and
agent of Circle Society, has fraudulently solicited members
of the public to participate in a commodity pool operated by
Circle Society. The Commission has also presented evidence
that those defendants misappropriated pool participants'
funds by soliciting funds for trading on behalf of the Pool
and then holding participants' funds in Saffron's
personal E-Wallet instead of segregating the funds in a pool
account and using the funds to trade on behalf of the Pool as
promised. The Commission has presented evidence showing that
Saffron and Circle Society further violated the Act by
failing to register with the Commission.
6. The Commission has shown that there is a reasonable
likelihood that Saffron and Circle Society will continue to
violate the Act and Regulations, as alleged in the Complaint,
unless they are restrained and enjoined from further
7. There is good cause to believe that immediate and
irreparable harm to the court's ability to grant
effective final relief in the form of monetary redress, and
to the Commission and the class of persons that it seeks to
protect, will occur from the sale, transfer, assignment, or
other disposition of the defendants' assets and records
unless they are immediately restrained and enjoined from
doing so by court order.
8. There is good cause to enter an order freezing assets
owned, controlled, managed, or held by, on behalf of, or for
the benefit of the defendants.
9. There is good cause to enter an order prohibiting Saffron
and Circle Society, their agents, servants, employees,
assigns, attorneys, and persons in active concert or
participation with the defendants, including any successor
thereof, who receive actual notice of this Order by personal
service or otherwise, from destroying records or denying the
Commission's agents immediate and complete access to
defendants' records for inspection and copying.
10. There is good cause to believe that, absent entry of this
preliminary injunction, the defendants are likely to
dissipate or transfer assets and destroy books and records.